By Sarah Townsend
UAE investor granted permission to pursue 'mismanagement' claims against bank
A UAE-based investor has won an appeal allowing him to pursue claims against Citibank in the Abu Dhabi courts.
The investor, Sami Abbas Hussein Ali Al Amri, accuses Citi of “mismanagement, self-dealing and an attempted cover-up”, according to a statement from the claimant.
Al Amri filed a lawsuit in 2014, but the Abu Dhabi Commercial Court of First Instance dismissed it over “technical flaws” in his complaint.
However, in a ruling on May 9, the First Commercial Appellate Circuit of the Abu Dhabi Court of Appeal reversed the earlier judgement and sent it back to the Court of First Instance to be heard by a new panel of judges.
The ruling enables Al Amri to pursue his allegations against Citi that the bank mis-sold investment products in the UAE for years, the statement said. Citi told Arabian Business it would “vigorously” defend the claims.
The claims relate to the CReAM (Citi Real Estate Asset Management) fund, which invested in 12 shopping centres in the UK between 2004 and 2006.
The fund was offered to GCC investors in 2004 as a “medium risk investment projected to yield annual revenues at a rate of 4 per cent”, the statement said.
However, the investments were eventually liquidated, it is alleged, costing investors millions of dollars.
Al Amri has alleged that he lost his entire investment of £1 million ($1.29 million ). He is seeking to recover that amount, together with interest and legal costs from Citi.
In particular, the lawsuit alleges that Citi “hid losses from investors in the CReAM (Citi Real Estate Asset Management) fund… for more than three years before sending a one-page letter that stated that previous quarterly reports showing value in the investment had been inaccurate as a result of a ‘Citi Private Bank operational error’”.
It also accuses the fund of buying two shopping centres in the UK at “questionable values”, without disclosing to investors that one of them seemed to be owned by the fund’s manager.
The lawsuit also claims Citi marketed the investments in the UAE, “without obtaining the requisite licence from the UAE central bank”.
A date will now be set for the next hearing in Abu Dhabi’s Court of First Instance.
A spokesperson for Citi said: “Citi has been made aware of the press release issued by Dr. Sami Abbas Hussein Ali Al Amri in respect of the May 9 decision of the Abu Dhabi Court of Appeal in the proceedings that he has brought against Citi.
“While that decision related purely to issues of procedure, the substance of the case will now be heard by the Abu Dhabi Court of First instance. Citi continues to consider the claims made against it to be entirely without merit.
“It will, therefore, continue vigorously to defend the proceedings.”For all the latest banking and finance 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.