INTERVIEW: Karim Sabbagh, DarkMatter CEO — why digital security threats are key issue for governments and businesses

DarkMatter CEO Karim Sabbagh explains why digital security threats are key issue for governments and businesses. (Illustration by Luis Grañena)
Updated 08 March 2019
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INTERVIEW: Karim Sabbagh, DarkMatter CEO — why digital security threats are key issue for governments and businesses

LONDON: Cybersecurity looks like becoming the big theme of this year, and maybe for many years to come.

In a survey in January by the World Economic Forum, the threat of cyberattack was mentioned as one of the most serious global threats by business leaders; in the Middle East it was an especially worrying concern, second only to the oil price as a perceived risk.

For Karim Sabbagh, that is both a worry and a business opportunity. “The impact on economies and societies is huge. One of the challenges we have as captains of industry and as citizens is that we’re fascinated by the ability we have to digitize things in our day-to-day lives. But the sad part is that for every dollar we spend on new digital enablement, we’re not spending enough on cybersecurity,” he said last week on the sidelines of the IDEX defense exhibition in Abu Dhabi.

Sabbagh is CEO of DarkMatter, the Middle East’s home-grown digital security firm. Amid the guns, tanks and desert camouflage gear at IDEX, he explained to Arab News why we should all be taking the threat of cyberattack much more seriously, and spending a lot more money to defend against it.

“I can show you a demonstration in our booth. I can interfere with your transport network, your airport operations or your power grid. All these things aren’t fiction, they’re all for real,” he said against a backdrop of simulated warfare displays in the UAE’s big defense show.

“The people with bad intent will continue to evolve their techniques and their approaches. So the question isn’t how do I completely eliminate the known risks, but how can I prepare for threats in the future.”

The “people with bad intent” are enemy governments, industrial spies, ransom seekers, or people who “subscribe to a cause,” he said.

“From what we’ve seen … state-led attacks were the most prevalent. In private organizations, it was more about accessing data and using that data for your own commercial benefit,” he added, leaving the distinct impression he knew far more than he was willing to say publicly.

DarkMatter has been in business since 2015, the brainchild of Faisal Al-Bannai, the Emirati entrepreneur probably best known for the Axiom chain of telecom stores he has made into one of the best-known names in Middle East retail.

“He’s the single shareholder, and what he does is quite unique,” Sabbagh said. “Faisal is an entrepreneur, very driven and very passionate, with all the traits you’d like to see from entrepreneurs. He likes to see things through, and has a very long-term view.”

Sabbagh became CEO of the company last year after a stint with SES, a Luxembourg-based firm that provides satellite communications services to the US and other Western governments.

Before that, Lebanon-born Sabbagh worked for many years in the UAE and Saudi Arabia as a partner at management consulting firm Booz & Co., specializing in telecommunications and media.

He takes a broad view of the digital communications business in the five business sectors DarkMatter serves.

“How do I come up with technologies, devices and applications that can give me peace of mind that communication on these devices is secure? As we were doing work on those things, we also started engagement in areas concerning digital transformation, and questions about how the government provides new services that are digitized to all its citizens and residents,” he said.

A key part of DarkMatter’s work is the interaction of humans with technology. Sabbagh cites a recent cyber-attack in Singapore, in which the country’s medical records were accessed and compromised.

After a lengthy audit, the authorities discovered there were two main reasons. One was that on the network there were patches and fixes that weren’t done. So there was something that belonged to the realm of known vulnerability that wasn’t attended to,” he said.

“The second one was human capital. Through human intervention that attack was enabled, not by design but by accident. It boils down to technology and humans, the story of humanity since we invented fire.”

Why is the threat of cyberattack so high up the list of concerns for the Middle East? Sabbagh examined this in a work he co-authored in 2008 entitled “Oasis Economies,” which examined the social tensions created in traditional Arab societies going through the modernization process. He feels the lessons then still apply today.

“My conclusion is that as you try to liberalize economies but try to preserve the social safety net, as you try to liberalize the way people go about their daily lives while preserving the culture, you’re constantly trying to manage these tensions,” he said.

Highly digitized and progressive Arab youths live side by side with more conservative forces, he added.

Smart nations and smart business can’t be truly smart unless they secure their communications.

Karim Sabbagh, DarkMatter CEO

“In one family, even one household, you move from a very traditional way of living to the kids being astrophysicists, building probes to land on the moon. I’m not exaggerating,” he said.

“We have a highly digitized young population, not like the ageing populations of the West. These digital tools are available to them and they can be very productive, but if used inadequately they can be very harmful. So it doesn’t surprise me that the awareness around cyber threats in the region is very pronounced, and rightly so.”

These issues are especially pronounced in Saudi Arabia, which is going through the rapid transformational process of its Vision 2030 reform plan.

The modernization strategy involves the creation of a series of hi-tech hubs such as NEOM, the $500 billion megaproject involving a highly automated conurbation in the Kingdom’s northwest.

“In the old world, the industrial technology and the information technology operated in two different environments, but today there’s a big intersection between them,” Sabbagh said.

“The bigger the intersection the more efficient these businesses are, but the downside is that there’s a bigger attack surface from a cybersecurity standpoint. So the more countries such as Saudi Arabia advance their digitization processes, the more advanced they’ll become, but the downside is that the attack surface expands.”

The solution, he believes, is “defense, defense, defense” against cyberattack. “The best attack is defense,” he added.

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BIOGRAPHY

BORN

Beirut, 1963

EDUCATION

MS in Technology Management from Columbia University

DBA (Doctorate) in International Business Management from the International School of Management (Paris)

MBA and BBA from the American University of Beirut

American Century University, New Mexico, US

CAREER

Regional director for strategy, Leo Burnett Middle East

Senior vice president, Booz & Co.

CEO, DarkMatter

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Expansion of DarkMatter into Saudi Arabia is one of the priorities for later this year, moving the firm outside its UAE base and complementing existing business centers in Canada, Finland and India. “Saudi Arabia is probably one of the markets we’ll look at very closely,” he said.

One line of defense Sabbagh unveiled at IDEX was the new version of DarkMatter’s successful Katim phone, an ultra-secure and virtually indestructible mobile device that the firm is aiming at the defense, energy and government sectors.

The first version of the device was a big commercial success, but the second is designed to operate in even more hostile environments, with the promise of total data security.

“It’s designed to military standards in terms of ruggedness. Our engineers ran over it in a truck, and I wasn’t amused until they showed me a video of the phone working afterward,” he said.

“You can immerse it in water for 30 minutes and it still works. If the phone detects any attempt to try to interfere with it, either physically or via software, the data stored on it will automatically self-destruct. It’s a leap forward for us,” he added, emphasizing the “quantum resistant crypto protocols” that DarkMatter uses.

What do governments, always protective of data security, think of the new device? “The government is one of the users, as well as businesses where you have critical infrastructure being deployed,” he said.

Sabbagh summed up DarkMatter’s essential business philosophy: “Smart nations and smart business can’t be truly smart unless they can secure their communications. If they aren’t secure I can access their communications, hack them and interrupt their operations. People can give me all the smart slogans they want, but if I can hack you and interrupt your information, that’s not a very smart proposition.”

 


Saudi banks extend $2.4bn in home loans in Feb.; demand broadens across nationals and expats

Updated 04 April 2025
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Saudi banks extend $2.4bn in home loans in Feb.; demand broadens across nationals and expats

RIYADH: Saudi Arabia’s banks issued SR8.91 billion ($2.37 billion) in new residential mortgages to individuals in February — a 28.33 percent annual increase, according to official data.

Figures from the Saudi Central Bank, also known as SAMA, show that apartment lending recorded the highest growth during this period, rising by 46.45 percent to SR2.9 billion.

While houses continue to dominate residential real estate financing with a 62.6 percent share, this is down from 65.24 percent in February 2024 as demand gradually shifts toward apartments.

House loans posted strong growth of 23.05 percent, reaching SR5.57 billion, yet land financing stayed modest at SR436 million, with a minimal increase of 0.61 percent.

This momentum comes as Saudi Arabia pushes toward its Vision 2030 target of achieving 70 percent home ownership.

Demand is being fueled by citizens and a growing expatriate population. A March report by Knight Frank revealed that 72 percent of Saudis and expats aspire to own homes, with the figure soaring to 93 percent among high-income citizens earning more than SR50,000 per month. Among expats, 77 percent now express a desire to buy property in the Kingdom.

Despite the strong demand, affordability remains a challenge, according to Knight Frank — particularly in cities such as Riyadh, where apartment prices have climbed 75 percent since 2019 and villa prices are up 40 percent.

To address this, Saudi authorities are rolling out a wave of regulatory and urban planning reforms. In March, the Royal Commission for Riyadh City and the Council of Economic and Development Affairs unveiled initiatives aimed at stabilizing prices and expanding access to homeownership.

These include lifting restrictions on land transactions and development in key zones of northern Riyadh, unlocking 81.5 sq. km of land for new housing and commercial projects.

At the time, Finance Minister Mohammed Al-Jadaan said the move was expected to reduce price volatility, with new plots priced at no more than SR1,500 per sq. meter and made available to Saudi citizens over the age of 25.

As part of its broader Vision 2030 strategy, Saudi Arabia has also been liberalizing real estate laws to attract more foreign investment, especially in fast-growing sectors such as tourism, housing, and special economic zones.

In 2024, officials confirmed that new regulations are underway to expand foreign ownership rights in strategic projects such as NEOM and the Red Sea.

While foreigners can already own residential property in specific zones and access 99-year leases according to the Real Estate Saudi platform, most residential mortgages are concentrated among Saudi nationals, supported by programs like Sakani and Dhamanat.

​Foreign investment in Saudi Arabia’s commercial real estate sector is subject to specific regulations and approval processes. Foreign investors are llowed to own real estate necessary for conducting their licensed business activities, including property for offices and employee accommodation, provided they obtain the requisite approval from the Ministry of Investment.

Additionally, for real estate intended for investment purposes — such as buying, selling, or leasing — the investment must meet a minimum threshold of SR30 million, with a commitment to develop the property within five years, according to the Saudi Embassy website in the US.

These measures ensure that foreign investments align with Saudi Arabia’s broader economic objectives and development plans.


Lebanon central bank must counter money laundering and terrorist financing, new governor says

Updated 04 April 2025
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Lebanon central bank must counter money laundering and terrorist financing, new governor says

BEIRUT: Lebanon’s central bank must focus on fighting money laundering and terrorist financing, its newly appointed governor said on Friday, as he began the job of salvaging the fragile banking sector and getting it off a global watchdog’s “grey list.”

The Financial Action Task Force placed Lebanon on its list of countries requiring special scrutiny last year in a move many have worried could discourage the foreign investment it needs to recover from a 2019 financial crisis that is still felt today.

Terrorist financing and money laundering are top concerns for the US, which wants to prevent Hezbollah from using the Lebanese financial system and cash flows through the country to re-establish itself.

Karim Souaid, who was appointed last week, listed his main priorities during his official handover with the outgoing acting central bank governor who preceded him.

“The most important of these are combating money laundering and terrorist financing, and identifying and disclosing politically and financially influential individuals, their relatives, and those associated with them,” he said.

Souaid replaces interim chief Wassim Mansouri, who has been overseeing the bank since long-serving governor Riad Salameh’s tenure ended in disgrace in 2023 due to the financial implosion and accusations of embezzlement, which Salameh denies.

Triggered by widespread corruption and profligate spending by the ruling class, the financial crisis in Lebanon brought the banking system to a standstill, creating an estimated $72 billion in losses.

Souaid said the central bank would work to reschedule public debt and pay back depositors, while calling upon private banks to gradually raise their capital by injecting fresh funds.

Those banks unable or unwilling to do so, should look to merge with other institutions. Otherwise, they would be liquidated in an orderly manner, with their licenses revoked and depositors’ rights protected, he said.

Souaid also pledged to safeguard the central bank’s independence from political pressure and prevent conflicts of interest.

“I will ensure that this national institution remains independent in its decision-making, shielded from interference, and grounded in the core principles of transparency and integrity,” he said. 


Office returns: Up to 59% of firms to increase investment in workplace fit-outs by 2030, says JLL 

Updated 04 April 2025
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Office returns: Up to 59% of firms to increase investment in workplace fit-outs by 2030, says JLL 

RIYADH: The global office sector is rebounding as companies scale back hybrid employment options, increasing demand for workspaces, a new survey shows.

The study by JLL, featured in the Global Office Fit-Out Costs Guide 2025, reveals that 59 percent of organizations are increasing investments in design and fit-outs. 

The report, which analyzes data from 68 cities across 40 countries, also highlights that office fit-out costs have risen in the past 12 months across all regions surveyed, with varying degrees of increase.

According to JLL, as in previous years, the highest fit-out costs are found in the US, Canada, and the UK, as well as Switzerland, Saudi Arabia, and the UAE.

Singapore and Japan also feature high in the list.

This correlates with the global office spaces market, which was valued at $3.1 trillion in 2022 and is projected to grow to $4.9 trillion by 2032. According to Allied Market Research, this represents a compound annual growth rate of 4.6 percent.

It also aligns with the growth of the office space market fueled by a rise in infrastructure projects for the commercial sector, including the development of new office buildings, business parks, and the renovation of workplaces in urban areas.

In a statement reflecting on the study, JLL’s CEO of Project and Development Services at Work Dynamics Cynthia Kantor said: “Five years following the start of the global pandemic, we continue to see the evolution and growing momentum toward the office sector.”

The JLL analysis further highlighted that multinational corporations must understand regional disparities in office fit-out costs to inform strategic planning.

Regionally, North America commands the highest office fit-out premium, with an average cost of 3,070 per sq. meter, well above the global average of 1,830 per sq. meter.

In Latin America, the average cost is 1,790, while in Europe, the Middle East, and Africa, the average price is 1,970. The Asia Pacific region offers the lowest average fit-out cost at $1,460.

Significant variations in office fit-out costs also exist between major urban areas. US cities lead the top 20 municipalities with the highest office fit-out costs, alongside prominent locations like Vancouver, Tokyo, London, and Dubai.

Fast-growing cities in India, South Africa, Vietnam, and China offer some of the lowest fit-out costs despite the fact they are seeing rapid construction growth and an evolving cost landscape.

Macro-economic impacts

The JLL report further sheds light on how, in the markets evaluated, increases in fit-out costs over the past 12 months were primarily driven by inflation, rising material costs, and currency fluctuations. 

Additionally, 75 percent of the markets saw a rise in raw material prices, while 50 percent experienced labor shortages that contributed to higher construction costs.

“Organizations need to factor in these potential cost factors throughout global construction when developing their fit-out budgets,” the JLL statement said.

It added that builder works or construction account for the largest component of fit-out costs  — 37 percent —  in all regions except Latin America. 

These costs can be most susceptible to raw material prices and supply chain risks. Mechanical and electrical expenses account for the second-largest cost, varying from 20 percent to 45 percent.

Sustainability continues to fuel growing demand

The study by JLL explains that as interest in healthier, energy-efficient workspaces surges and supply struggles to meet demand, the need for sustainable fit-outs is growing.

According to the survey, 60 percent of markets have seen a rise in client inquiries for more sustainable fit-outs over the past year.

This aligns with recent JLL Future of Work research, which revealed that 66.66 percent of organizations worldwide plan to increase their investment in sustainability over the next five years.

“A large part of sustainable fit-out costs are dedicated to mechanical and electrical services, which, across all countries, were found to account for an average of 29 percent of total fit-out expenses, with some regions reporting 40-50 percent of costs,” the JLL report said.

“However, these upfront costs are often where the greatest long-term cost efficiencies can be found, as research has also shown that investing in upgrades to M&E services can save between 10 percent - 40 percent on operational energy costs, depending on the level of investment and upgrade,” it added.

Investing in energy-efficient components during fit-outs and consulting with sustainability experts early in the planning phase can help incorporate sustainability requirements and costs into decision-making, thereby minimizing the risk of late adjustments, the JLL statement justified.

Optimism for offices amid caution over potential challenges

Despite a positive outlook, office fit-out development faces several challenges.

That said, the report underlines a need for global firms to address local and regional issues such as labor shortages, talent acquisition, and material availability, as well as liquidity to ensure project success.

The report also suggests that economic and political uncertainty, particularly trade and tariff implications, continue to create instability.

Consequently, early planning for lease expirations and strategic investment in existing buildings is set to benefit both landlords and occupiers, helping to manage costs and navigate the tighter timeframes caused by hesitancy around investment.

“The global office sector faces a complex landscape of challenges and opportunities in 2025,” the Director of Research and Strategy at Work Dynamics Europe, the Middle East, and Africa, Ruth Hynes, said.

“As corporate clients grow and expand their footprints, we anticipate the office construction will remain active even amid market uncertainty, and encourage early, strategic planning to ensure the success of fit-out initiatives,” Hynes added.


Oil Updates — crude tumbles 8% as China retaliates with tariffs on US

Updated 04 April 2025
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Oil Updates — crude tumbles 8% as China retaliates with tariffs on US

  • Brent and WTI set for lowest close since April 2021
  • China to impose retaliatory tariffs on US

LONDON: Oil prices plunged by 8 percent on Friday, heading for their lowest close since the midst of the coronavirus pandemic in 2021, as China hit back in an escalating global trade war with the US after President Donald Trump’s barrage of levies this week.

China announced it will impose additional tariffs of 34 percent on all US goods from April 10. Nations around the world have readied retaliation after Trump raised tariff barriers to their highest in more than a century, leading to a plunge in world financial markets.

Brent futures dived by $5.30, or 7.6 percent, to $64.84 a barrel by 3:54 p.m. Saudi time. US West Texas Intermediate crude futures lost $5.47, or 8.2 percent, to $61.48.

Both benchmarks were on course for their biggest weekly losses in percentage terms in more than two years.

“China’s aggressive countermove to US tariffs all but confirms we are heading toward a global trade war; a war that has no winners and which will hurt economic growth and demand for key commodities such as crude oil and refined products,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Fuelling the oil sell-off was a decision by the Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, to advance plans for output increases, with the group now aiming to return 411,000 barrels per day to the market in May, up from the previously planned 135,000 bpd.

Imports of oil, gas and refined products were given exemptions from Trump’s sweeping new tariffs, but the policies could stoke inflation, slow economic growth and intensify trade disputes, weighing on oil prices.

Goldman Sachs analysts responded with sharp cuts to their December 2025 targets for Brent and WTI by $5 each to $66 and $62 respectively.

“The risks to our reduced oil price forecast are to the downside, especially for 2026, given growing risks of recession and to a lesser extent of higher OPEC+ supply,” the bank’s head of oil research, Daan Struyven, said in a note.


Closing Bell: Saudi main index slips to close at 11,882.65

Updated 03 April 2025
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Closing Bell: Saudi main index slips to close at 11,882.65

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Thursday, losing 142.40 points, or 1.18 percent, to close at 11,882.65.

The total trading turnover of the benchmark index was SR5.53 billion ($1.47 billion), as 58 stocks advanced and 184 retreated.

Similarly, the Kingdom’s parallel market Nomu lost 445.6 points, or 1.43 percent, to close at 30,640.93. This came as 27 listed stocks advanced while 67 retreated.

The MSCI Tadawul Index lost 20.19 points, or 1.32 percent, to close at 1,504.15.

The best-performing stock of the day was Fitaihi Holding Group, whose share price surged 9.65 percent to SR4.43.

Other top performers included Zamil Industrial Investment Co., whose share price rose 6.57 percent to SR38.85, as well as Mobile Telecommunication Co. Saudi Arabia, whose share price surged 4.97 percent to SR11.82.

Tabuk Agricultural Development Co. recorded the most significant drop, falling 8.58 percent to SR12.36.

Arabian Co. for Agricultural and Industrial Investment also saw its stock price fall 7.59 percent to SR53.60.

Raydan Food Co. also saw its stock price decline 7.44 percent to SR19.16.

Horizon Food Co. has announced the board resolution to transfer from Nomu to the main market and appoint Al-Istithmar Capital as a financial adviser for the transition. According to a Tadawul statement, the transfer is contingent upon approval from the Capital Market Authority in accordance with listing regulations and is subject to meeting all requirements set by the Saudi Exchange.

Horizon Food Co. ended the session at SR40, up 2.56 percent.

Emaar, The Economic City seeks to convert SR4.12 billion worth of debt owed to the Public Investment Fund into capital. 

The proposed debt conversion is one component of the company’s capital optimization plan announced in September, designed to stabilize the entity’s financial and operational positions as well as optimize its capital structure to boost its ability to move forward with its growth plans.

Emaar, The Economic City ended the session at SR14.44, down 0.28 percent.

The Saudi Stock Exchange has announced the suspension of trading in the shares of seven listed companies for one session on Thursday due to the firms’ failure to disclose their annual financial statements ending Dec. 31 within the statutory period specified in the Securities Offerings and Continuing Obligations Rules issued by the CMA Board.

From the main market, the firms include Saudi Industrial Development Co., Development Works Food Co., and National Gypsum Co., as well as Arabian Contracting Services Co. and Al Jouf Cement Co.

From the parallel market, the companies are Keir International Co. and Knowledge Net Co.