Seven charged in bank fraud case

BANK FRAUD: Seven charged with bilking Dubai Islamic Bank out of $501m. (Getty Images)

Seven people have been charged with defrauding the Dubai Islamic Bank (DIB) out of $501 million (1.84 billion dirhams), documents at the Public Prosecutor's office say.

The charges involve the largest sum yet in the emirate’s wide-reaching corruption investigations that began last spring.

They follow similar charges for fraud allegedly committed on the property developers Sama Dubai and Mizin.

The prosecution's bill of indictment dated December 25 names seven suspects in the case, two of whom have fled the country, according Zawya Dow Jones.

It said the defendents defrauded DIB by creating fake companies and getting the bank to lend money to projects.

Among those charged in the DIB case are a Turkish businessman and two Britons. Also charged are two of DIB’s former senior executives, both Pakistanis.

A Pakistani businessman with US citizenship, is also being sought by the authorities.

One of the British executives, who was director of a luxury property development company in Dubai, was also charged with criminal complicity.

The bank said it had set aside provisions for a loss of 496 million dirhams to cover its exposure to CCH International, a company allegedly connected to several of the defendants.

“DIB believes that the current provisions, together with collaterals foreclosed and being pursued, are adequate to cover its exposure to CCH, even in the current economic downturn,” the bank said.

Last year, the bank foreclosed on The Plantation, a proposed $3.5 billion equestrian development in Dubailand that received funds from CCH.

In September the bank seized land allocated to The Plantation in a move that was then contested by the developer.

DIB said it was continuing to chase other assets related to the deal.

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READERS' COMMENTS

check and balances
Posted by Hamid on Tuesday 10 March 2009 at 05:21 UAE time

This highlights the need for checks and balances and oversees committees and regulators, who should continuously check the integrity of various businesses, especially banking and equity institutions. Failure to do so will be very costly.

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