UAE | Crime

Lawyer accuses Dubai Islamic Bank official of concealing fraud

Officials allegedly conspired in cover-up leading to huge loss

By Bassam Za'za', Senior Reporter
Published: 00:00 April 6, 2010

Dubai: A lawyer stunned a court on Monday when he accused Dubai Islamic Bank's (DIB) ex-chairman [2001-2008], and three DIB executives for collaboratively concealing fraud operations leading to a Dh1.8 billion loss.

In an unexpected turn of events — which startled the Dubai Court of First Instance's packed courtroom — Dr Habib Al Mulla on Monday claimed that between 2001 and 2008, the bank's former chairman, the head of the financing commercial operations' team, the operations' manager and risk management's chairman, and the Financial Control Department (FCD) conspired to cover up fraud operations, which seven suspects have been charged with committing.

Presiding Judge Abdul Jawad adjourned the case until May 3 for prosecutors to review and respond to the documents and requests submitted in Monday's hearing.

Prosecutors had charged seven suspects, five businessmen and two ex-DIB officials of defrauding the bank of Dh1.8 billion between 2004 and 2007.

"I request the court's permission to take legal action against FCD, DIB's former chairman [2001-2008] and three executives because they caused damage to my client [DIB's ex-financing manager, U. H.].

"They conspired and remained silent to what prosecutors described in the chargesheet as ‘fraudulent operations and defrauding DIB of Dh1.8billion'. "Their [alleged] cover up led to charging U. H. with crimes which he did not commit," Dr Al Mulla who presented a written complaint to Presiding Judge Hamad Abdul Latif Abdul Jawad said.

The lawyer also requested the three-judge panel for time to contact Dubai's legal department and obtain an official permission to sue FCD [it being a government department].

Negligence

In his defence, Dr Al Mulla accused FCD's Egyptian auditing director, M.M., of being negligent and issuing a ‘baseless, unfounded and void report'.

"M.M. personally benefited by issuing such a ‘groundless and untrustworthy report' because the alleged fraud happened during a period in which he was responsible for auditing DIB's finances.

"In his incompetent report, he deliberately covered up for the real parties, responsible for the loss [borne by the aforementioned executives].

"He [allegedly] did this to protect himself from being questioned for any incompetence or negligence in performing his auditing job… especially concerning the credit facilities granted by the bank to an overseas company [between 2002 and 2007]," Dr Al Mulla, who asked the court to acquit U.H., said.

The advocate requested the court to assign a three-banking-experts committee [from the Justice Ministry] to review all the documents and financial reports associated with the case.

Prosecutors charged three businessmen, a Turk fugitive, A.I., C.M. and R.L. — both British — with defrauding DIB using fabricated documents of bogus transactions which they submitted to the bank to finance their projects.

Aided

A.I., C.M., R.L. and their compatriot businessman, A.F., were charged with aiding and abetting U.H. and his Pakistani deputy, R.U., in accepting Dh6million in bribes.

An American runaway, Z.U., [U.H.'s brother] was charged with defrauding DIB of Dh7.34 million.

During Monday's hearing, Assistant Chief Prosecutor Khalid Al Zarouni, who investigated the case, asked the court to implement the toughest punishment applicable against the seven defendants [two are at large] whom he described as ‘killers of the national economy'.

"The suspects formed a group of organised criminals... They mercilessly intended to crack down DIB and defrauded Dh1.8billion, belonging to more than one million investors.

Affected parties

"The suspects killed the whole nation by destroying one of its colossal economic pillars..." Al Zarouni argued.

DIB's lawyer, Essam Al Tamimi, asked the court to return the file to prosecutors to add new charges of abuse of public service, bribing public servants and swindling public money.

Defence lawyers Salah Beloushi, Samira Gargash, Abdul Aziz Al Matroushi and Yousuf Al Ali, argued that the accusations were baseless and groundless.

They defended that prosecutors failed to submit a corroborated evidence against their clients. All suspects pleaded not guilty and dismissed what they described as "fabricated charges".