Posted inBanking & Finance

UAE officials jailed for embezzlement in RAK case

Officials defrauded Ras Al Khaimah Investment Authority of $17.2 million, court documents show

Massaad refuted the claims in a telephone interview with Arabian Business in 2012, when rumours of the fraud were first circulating in UAE media and Masaad was reported to have fled the UAE.
Massaad refuted the claims in a telephone interview with Arabian Business in 2012, when rumours of the fraud were first circulating in UAE media and Masaad was reported to have fled the UAE.

Two former senior officials of Ras Al Khaimah Investment Authority (RAKIA) have been sentenced in absentia to 15 years in prison for embezzlement of public funds, according to court documents issued on Tuesday.

Khater Massaad and Gela Mikadze were sentenced on April 26 by a court in Ras Al Khaimah (RAK) for defrauding RAKIA of $17.2 million in 2011.

A third man, George Janashia, was also sentenced to 15 years in prison in absentia.

Mikadze and Janashia have been ordered to repay $12.8 million and $4.4 million respectively. The three defendants were also fined $17.2 million, the court documents seen by Arabian Business show.

Judge Sameh Hamed Shaker, President of the Court, said the defendants had been “entrusted with maintaining and preserving the public interest, they intentionally caused damages to the money and interests of the authority for which they work [RAKIA]”.

The charges relate to the 2011 sale of Georgia’s Poti Sea Port – at the time 100 percent owned by RAKIA. The documents showed that a joint venture agreement between Poti Sea Port and a limited liabiity partnership called Raystar Trade was put in place and then cancelled.

The Court noted in its judgment that under the Raystar-PSP JV agreement, Raystar was to contribute nothing more than its expertise in managing ports even though the firm had “no experience in this field”.

The beneficiaries of Raystar were Mikadze and Janashia. Under the agreement, the JV contract was to be cancelled following payment of $17.2 million to the company. The payment was made to the personal Swiss bank accounts of Mikadze and Janashia, according to the documents.

A spokesman for Massaad’s legal team told Reuters Massaad strongly denied the “trumped up charges”.

“No evidence has ever been presented to him or any of his legal representatives,” the spokesman said.

Massaad refuted the claims in a telephone interview with Arabian Business in 2012, when rumours of the fraud were first circulating in UAE media and Masaad was reported to have fled the UAE.

Massaad was detained in Saudi Arabia last year under an arrest warrant issued by the RAK government. He ran RAKIA from 2007 until 2012 and was also behind the establishment of UAE-based RAK Ceramics, one of the world’s largest manufacturers of porcelain goods.

Arabian Business has contacted Mikadze, the former general manager of RAKIA’s Georgia division and now a member of Georgia’s parliament, for comment.

Janashia’s whereabouts are unknown.

Follow us on

For all the latest business news from the UAE and Gulf countries, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube page, which is updated daily.