Kippreport gets the scoop from Neelesh Bhatnagar, CEO of Emax, and Nadeem Khanzadah, head of omnichannel retail at Jumbo GroupSeptember 2, 2015 5:24
You get what you pay for
Tonnes of gold imported to Dubai turned out to be fake. A valuable – and very expensive – lesson for the traders who were duped.
August 17, 2010 1:58 by shafeer
Several tonnes of gold imported into the UAE by traders and investors has turned out to be fake, reports Emirates 24-7. The revelation has led to “millions of dirhams in losses and high levels of stress to the victims,” says the website.
Mohamad Shakarchi, Managing Director of Emirates Gold, said: “A lot of people in the UAE who tried to import gold at lower prices or through dubious overseas companies have been cheated. We have inspected many consignments from African countries, especially Ghana, and found that there is not an ounce of gold in them. For importing pure dust or other metals with yellow colour, these traders have paid several million dirhams.”
According to the report, some five tonnes of fake gold is now sitting with Dubai Customs. It says that a tonne of gold will cost approximately $40 million, so merchants estimate that the minimum loss of fake gold imported by local traders is nothing less than $200 million.
The scam goes like this, according to Emirates 24-7: African gold merchants claim to be in possession of large quantities of gold dust or gold bars, which they offer at below market prices. The would-be buyer is made to send money for travel of the seller, for insurance, for shipping and for refinery assays before they would receive anything of any value. Investors are shown samples, which may be original gold. But when the consignment reaches the port, it will be only mud or sand.
“The traders got greedy,” said Shakarchi. “They thought they were getting gold at a discounted rate.”
Kipp feels bad for the traders who lost so much money, but not too bad – by grabbing at what they thought was a bargain they ignored the most important two rules of making any sort of purchase: First, you get what you pay for (cut price items are cut price for a reason. In fact, in this instance they didn’t even get what they paid for), and second, “caveat emptor” – let the buyer beware.
Do you have any sympathy for the cheated traders?