A land of opportunity… for scammers, too

A land of opportunity… for scammers, too

High profile cases are mounting in the UAE as bribery, abuse of power, and financial impropriety tear through companies. These crimes harm both shareholders and investor confidence.

June 1, 2010 10:36 by Katherine Azmeh

In fact bribery charges are central to many of the high-profile cases currently making headlines, including those involving Zack Shaheen, ex-CEO of Deyaar, as well as Mohammed Khalfan bin Kharbash, a former minister of state.

Abuse of power is also a common theme, as in the case of the Abdullah brothers who withdrew millions of dollars of corporate money in unauthorized transactions. An investigation by the DFSA found the brothers owed more than $99 million, plus the value of 1.9 million grams of gold. The investigation found the Abdullah Brothers “contravened DFSA Laws and Rules in that they engaged in the practice of withdrawing Damas funds for their own personal use and did not disclose the drawings or other transactions to, or seek the approval of the Board,” according to an official statement.

Abuse of power is also implied by the prosecution in the case of Omar bin Sulaiman, former DIFC governor. Dubai Public Prosecution announced earlier this month his release from jail after bin Sulaiman repaid more than $13.5 million he was accused of having taken as illegal bonuses, Zawya.com reported, but said he was still under investigation.

“The UAE’s federal structure and the mixture of Islamic legal principles and English common law have created a very complex and confusing judicial structure,” according to the Carnegie Endowment for International Peace. “UAE law is based on Islamic legal principles and influenced by English common law and Egyptian legal traditions.”

As tradition comes to terms with the robust and expanding business environment, policy makers are challenged to keep pace with the legislative weaknesses exposed by unscrupulous players. Much like the cyber-criminals who chart the course for an entire industry of protective software creators, lawmakers sometimes find themselves learning from the bad guys, as financial improprieties expose new loopholes. But there’s a lot at stake: with Dubai struggling to restructure billions in debt, investor confidence depends on transparency, oversight, and a clear message that fraud will be prosecuted.

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Tags: Abdullah brothers, bonyan, Damas, Deyaar, DIB, former DIFC governor, Mohammed Khalfan bin Kharbash, Omar bin Sulaiman, Saad Abdulrazak, Tamweel, uae corruption cases, uae fraud, Zack Shaheen