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‘I lost Dh740,000 on investments my fund manager profited from’

Businessman alleges he was tricked into putting mutual fund assets into schemes without being told about their high service fees

  • By Jay B. Hilotin, Chief Reporter
  • Published: 22:59 November 7, 2012
  • XPRESS

  • Image Credit:
  • hoodwinked: Siju Chacko said he was pressured into putting money into elaborate schemes by a smooth-talking bank salesman

DUBAI: An Indian businessman claims he was duped into moving his savings into elaborate investment-cum-insurance policies through high-pressure selling tactics and misleading enticements

Saju Chacko, a logistics executive, said he was hoodwinked into putting his mutual fund assets into multiple investments of the same nature without being told about service fees for each of these plans.

“I feel scammed,” he said. “I trusted a professional manager and a big bank with my hard-earned savings. They are the only ones who profited from my losses in investments which were never fully explained to me. It seemed the relationship manager was only interested in getting his commissions.”

Chacko moved his investments in mutual funds into several smaller investment-insurance funds offered by the manager who promised to grow his wealth by taking advantage of global international market opportunities.

At one point, Chacko said he was investing $41,000 (Dh151,000) per month for eight investment instruments offered by the same bank relationship manager. “It was too late when I realised I had to pay a fee of $300 per month for each of these instruments, though in reality, there are only two investment types.”

Chacko said his decade-old relationship with the bank has been damaged.

“Whenever I visit (the bank), I was approached by relationship managers offering various (investment) schemes. I have stayed away from these as I was not comfortable. However, as time passed, I had to oblige the relationship manager due to his persistence. But I was cheated ruthlessly.”

By the time he decided to cash in his investments, he claimed to have lost over $200,000 of his personal money.

“It was a bitter experience trusting this manager with my personal investments. He coaxed me into investing in funds and insurance policies which were of a similar nature, with high monthly fees which only benefitted the salesman and the bank.”

“I was promised investment yields that were never true,” he said. Chacko said he had lodged a complaint with the UAE Central Bank and is lodging a complaint with the ombudsman of the UAE Insurance Authority. The Indian executive, who owns businesses in Dubai, India and Singapore, said: “Never blindly trust these investment advisers, even if he is employed by your trusted bank.”

The bank confirmed Chacko has been a client for seven years, adding: “It is important to note that Mr Chacko fully acknowledges that he has entered these policies after fully satisfying certain extensive due diligence procedures put in place by the bank to safeguard its customers’ interest at all times.”

The bank said that the businessman initially requested to reinstate lapsed policies where he had stopped contributing. “Mr Chacko had not funded the account(s) associated with his investment insurance. Subsequently, a ‘medical check’ was also requested by the underwriting insurance company, which the client did 
not agree to.”

(The bank has not been named due 
to legal reasons. The story is being 
published in public interest)

Comments (4)

Your comments
  1. Added 12:19 November 8, 2012

    Is he REALLY a businessman or simply someone with lots of inherited wealth to blow? If half as successful at business as the article implies, why would he have not read the fine print on his contract? You play, you take the risks. (Unless you are Greece, Spain, et al, where taxpayers bail you out).

    Louie Tedesco, Dubai, United Arab Emirates

  2. Added 09:51 November 8, 2012

    I was once employed by a bank in the similar position. While there, I noticed that none of the investment advisers came from financial backgrounds or possessed any sound financial qualifications. We were required to work on a target basis which aimed at high revenues within short deadlines, therefore reducing us to cheap salesmen. Unfortunately we were forced to carry out these tactics or 'walk away' Our manager specifically told us not to 'mis-sell' to clients but at the same time trained us to close the sales within 1-2 days, thus giving them no time to read the documents carefully/ consult others /run a background check, etc. Clients with a high investment potential and lack of financial knowledge were specifically targeted. I didn't close a single deal and was eventually terminated in a month's time, but thankful that I didn't resort to such malpractices.

    Marie Jane, Abu Dhabi, United Arab Emirates

  3. Added 09:15 November 8, 2012

    People have a right to know the names of these fraudsters. We need to know the facts - the bank names, the relationship manager's name, etc. The media in India and US doesn't hold back these details.

    abu fulan, dubai, United Arab Emirates

  4. Added 00:35 November 8, 2012

    The Bank cannot be blamed , For any business involving higher returns the risk involved is high, Mr.Chacko as a businessman holding business interests in different countries must be aware of what is risk , Its clearly mentioned in the application form of any banks on the terms and conditions and whenever a customer signs these agreements he is obliged to adhere to the policy. We can agree if a person who has no educational background or a blue collar employee is faced with such a bitter experience but when a businessman like chacko who has wide exposure to international operations is blaming banks , salesman for his losses, the this is really unacceptable. After all business operating in any part of the world are for profits, Every individual should have due diligence before opting for any investment plan ,In this modern world information can be sought from internet , Customer service numbers etc..

    MOHAMED, DUBAI, United Arab Emirates

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