Corruption cases that rocked Dubai
A string of arrests and unprecedented action by financial regulators shows that the emirate is clamping down on fraud. We take a look at six cases that shook Dubai Inc.
March 25, 2010 4:29 by Katherine Azmeh
5. Kabir Mulchandani, Chairman of Dynasty Zarooni
Kabir Mulchandani, chairman of property developer Dynasty Zarooni, was detained by police last year on allegations that he defrauded investors of more than $100 million.
According to press reports at the time, investors paid AED300,000 monthly for which Mulchandani promised a return of a AED1 million per month after the first six installments, according to a report by the 7DAYS newspaper last year. Claimants contended that Mulchandani failed to deliver on promised returns.
Mulchandani rebuffed the allegations, maintaining that the claims amounted to disgruntled investors looking for a way out of their financial obligations to Zarooni.
He denied that the clients were guaranteed a return on their investments, contending that the monthly fee secured for the investors “the right to first refusal on properties sold by Dynasty Zarooni at pre-launch prices,” according to the report by 7DAYS.
6. Tawhid, Tawfiq, and Tamjid Abdullah, founders of Damas International.
The founders of Damas, the Dubai-based luxury jeweler, were fined $3.72 million by Dubai’s Financial Services Authority (DFSA) over a series of ‘unauthorized transactions.’
In an announcement earlier this month, the DFSA detailed multimillion dollar penalties and other remedies in the case against brothers Tawhid, Tawfiq, and Tamjid Abdullah. The penalties are reportedly the largest thus far imposed by the DFSA, according to a report in Zawya Dow Jones.
Based on findings that the brothers withdrew corporate funds for their personal use, Dubai’s regulatory authority charged that the brothers failed to exercise ‘appropriate corporate governance.’ They were further ordered to repay $99.4 million and to return 1.9 million grams of gold – worth nearly $63 million at the end of the third quarter, 2009. The three are barred from acting as directors with any company in the DIFC for ten years.
There is no suggestion that the brothers were arrested, or that the police were involved in the case.