Dubai, October 17: The CEO of Dubai Islamic Bank (DIB) and the Director of the Audit Department at the Ruler’s Court told a court on Thursday that over $500million was swindled from the bank by CCH, a financial brokerage firm owned by a defendant in the case.
Abdullah Ali Obeid Al Hamili, CEO, said he was Deputy CEO for Business Services at DIB in July 2007 when the alleged swindling took place.
He said he was informed by an official in the bank’s Credit Department about the crime but he had to leave the country for two months.
“When I was back from my leave and during a meeting of the Board of Directors held in October 2007, I was so irritated to learn that the board knew of the swindle but did not take legal action,” he told the Court of First Instance.
The case involves a former deputy manager and executive manager of the bank, both Pakistanis, and five businessmen — a Turkish absconder (owner of CCH), three Britons and an American absconder.
Al Hamili said after knowing that the board officials had failed to take action, he reported the matter to the Audit Department of the Ruler’s Court.
“Auditors checked with the management of the bank and searched for all necessary documents, bonds and agreements. They concluded that CCH swindled the bank by raising credit limit up to $500 million.
“The defendants managed to con the bank through fictitious deals and several bogus sale and purchase deals of merchandise and real estate,” he added.
Mohammed Mostapha, Audit Department Director, told the court that the bank and CCH signed a settlement agreement worth $500 million.
“That agreement was endorsed by the then bank chairman,” the auditor said.
Due to the huge amount to be settled, the auditors started checking the bank books. “We knew about flagrant violations committed by the two Pakistani managers who were in charge of the Project Structure Management in one of the firms owned by the bank,” the witness said.
The two Pakistanis were the main front for communication between the bank and CCH and they were in charge of negotiating on conditions that rule the investment portfolio.
One of the ex-DIB senior managers is accused of collecting bribes worth $750,000 and the other $950,000 in return for facilitating some bogus transactions and helping and abetting in cheating DIB.
Two of the British businessmen are accused along with the Turkish businessman of defrauding Dh1.8 billion ($500 million) from DIB.
The trio is also accused of forging documents of bogus transactions made by companies they established some time between 2004 and 2007 and submitted them to the bank to get financing for their projects.
The sixth defendant, a British businessman, is accused of criminal complicity as he allegedly abetted and conspired with the two Britons and the Turkish to cheat the bank.
He reportedly invested part of the swindled bounty in buying and investing in lands in Dubai, including the Plantation and other projects in Dubai Land. The American businessman is accused of swindling more than Dh7 million ($2 million) from the bank.
–Agencies