Business | Investment
Unscrupulous investment firms 'will be punished'
The UAE Central Bank on Tuesday reassured Federal National Council (FNC) members of its strong stance against illegal investment companies seeking to raise funds from the public.
- By Samir Salama, Associate Editor
- Published: 23:30 December 16, 2008
Abu Dhabi: The UAE Central Bank on Tuesday reassured Federal National Council (FNC) members of its strong stance against illegal investment companies seeking to raise funds from the public.
The issue was raised by member Mohammad Abdullah Al Za'abi, who posed a question to the government in relation to recent cases where some investment companies lured the public to deposit funds in return for unjustifiably high returns.
Al Za'abi questioned the central bank's measures and their effectiveness in stopping these illegal activities.
"The central bank failed to inform us of many companies, which are publishing advertisements and announcing they possess billions of dirhams.
"One such company announced that it owned Dh7 billion," he said and asked why the bank did not track these companies and bring their owners to justice.
He proposed law No. 10 concerning the central bank be amended to include stiff penalties for these crimes.
Tempting
"Any natural or legal person that collects funds from the public for investment and management without an appropriate licence issued by the central bank is committing a federal crime punishable by law No 10 regardless of whether these activities achieve profits or losses," Sultan Bin Nasser Al Suwaidi, governor of the central bank, told the House.
"This usually occurs through tempting the public with unreasonably high monthly returns."
He admitted more coordination was needed with local and federal institutions and that the law for the central bank should be amended to ensure more protection for the public.
Obaid Humaid Al Tayer, Minister of State for Financial Affairs, said the law would soon be amended and promised that the new version would be submitted to the legislature.
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