KHI is now pursuing project financing to fund its growth, rather than issuing more shares.

The criticism is significant as KHI is the only company to have a primary listing on the exchange, which continues to suffer from low trading volumes. It also comes at a key time for the DIFX, which is trying to attract companies to list.

Since Dubai-based KHI listed its shares in March 2006 at $9.25, they have fallen by 14 per cent to hit $8 on 7 November.

“The share price performance does not reflect KHI results,” says Sarmad Zok, chief executive officer of KHI. “The problem is not how to value the shares, the issue is liquidity on the DIFX. I wished we raised $1,000 million instead of $400 million through the IPO.”

The falling share price has deterred the company from issuing new shares and forced it to find alternative funding sources. “We are somewhat capital constrained, but we are not going to issue new shares at $8.50 a share,” says Zok.

KHI also has global depository receipts traded on the London Stock Exchange. However, it has no plans to list its shares elsewhere.

Instead, it will refinance 16 of its projects in the next two years by raising $500 million in non-recourse financing. The capital raising will be done on a project basis and $100 million will be secured by the end of the year.

KHI is planning to develop 10-15 hotels in China by 2012, adding to its portfolio of 35 hotels across the Middle East, Africa and South-East Asia.

Its net cash position has fallen from $349.9 million in June 2006 to $30.8 million today. “The pace of acquisitions will slow,” says Zok.