The regional CEO of Australian engineering firm Hastie Group - which went bust in May - has fled the UAE after bouncing two cheques worth around $700,000, it was reported on Wednesday.
Dubai-based executive Gavin Appleby and former human resources manager Gary Allen have returned to Australia after a lack of company funds caused a series of cheques to bounce, which is a criminal offence in the UAE.
“Basically, the bottom line for me is that I found out (on June 1) that there were still four cheques in the market with my signature on. These were signed last year [while] I was employed by Hastie Group Middle East for workers' accommodation and the head office in the UAE.
“I am also now aware that one of those cheques has bounced and officials have turned up at the Hastie UAE office yesterday,” he was quoted as saying in a report by the Australian newspaper on Wednesday.
“Mr Appleby said he hoped to clear his name in the UAE, saying he understands the government takes a case to Interpol if it can't find action against an individual within six months,” the report added.
Appleby left his role with Hastie in January, but he claimed his name remained on a number of cheques, which made him personally liable.
Hastie, which has 7,000 employees in Australia and overseas, provides refrigeration and air conditioning services for the building industry and worked on projects in the UAE, including Abu Dhabi's Dalma Mall and Dubai's JAL Towers.
Hastie posted a loss of $145m in the six months to December and earlier this year it reported a $19.5m "accounting irregularity", saying that an initial investigation showed an employee had falsified accounts to meet profit forecasts.
According to documents published in May by Australia’s ABC news network, senior executives wired AED11m ($11.29m) funds back to Sydney days before the company formally went into administration, leaving up to 1,500 workers in the UAE out of pocket.
Three executives then left the country and returned to Australia, the report added.
ABC claimed the transfer was ordered by Hastie’s head office in Sydney and came after executives had failed to negotiate a restructuring deal with banks
While no unlawful activity has been suggested, ABC said the transfer of funds and the exodus of management has “left Hastie's head office in Dubai with little or no money to cover the entitlements of around 1,500 workers, some of whom are expatriate Australians.”
Former Hastie Group chief executive Bill Wild said a lot of the blame for the company going bust can be attributed to a series of bad acquisitions in the Middle East. Wild highlighted the purchase mechanical and electrical contractor Rotary Humm, whose losses resulted in a massive writedown for Hastie.
''They bought companies that were worth nothing, it was a disaster,'' he told ABC News. ''But the companies weren't worth two bob. They started hiding losses and burying stuff in the balance sheet,'' he added.
Wild reported that issues with Rotary Humm’s projects in Dubai and Abu Dhabi also led problems and resulted in a writedown of US$50m November.
According to reports, if administrators do not reach an agreement with creditors, they will embark on steps to wind up the business.
The UK and Ireland subsidiaries of Hastie Group are separate corporate entities, and have not gone into administration.For all the latest construction 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.
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