UAE | General

Employees fear arrest after taking out loans for Sharjah company

Employees of a Sharjah-based company have accused their employer of trapping them in a financial scam by acquiring bank loans to the tune of millions in their names by fraudulent means.

  • By Anjana Sankar, Senior Reporter
  • Published: 23:35 August 3, 2008
  • Gulf News

  • Employees hold a meeting to discuss their plight. They allege the company gave inflated salary certificates to banks.
  • Image Credit: Anjana Sankar/Gulf News

Dubai: Employees of a Sharjah-based company have accused their employer of trapping them in a financial scam by acquiring bank loans to the tune of millions in their names by fraudulent means.

Aggrieved employees, who now face arrest for dud cheques and failed loan payments, said their company, City Emperor General Trading LLC, that has over half a dozen establishments under its umbrella, including the Al Qathara Supermarket and department stores in Abu Dhabi, where they were working, opened accounts in their names and made salary transfers to several banks simultaneously to take out huge loans.

Gulf News made several attempts to contact the owner of the company, but he refused to comment.

"We were requested by the company's managing director to take personal loans to salvage the company from a financial crisis, and the company assured us it would be solely responsible for the monthly payments," said Mohammad Iqbal Saidu Mohammad, accounting manager with the firm.

Threatened

He added those employees who did not agree were threatened by the management, and many others were made to sign documents, which were used by the company to open accounts and apply for loans without their knowledge.

Mohammad Iqbal claims the company has taken loans in his name up to a total amount of over Dh700,000, and now the company is not paying the installments, he has cases filed against him by banks.

According to him, although his salary was Dh7,500, the company gave a false salary certificate of Dh12,500 to banks, and transferred the amount for five months in order to make him eligible for loans.

Another employee, Rajesh, has loans of Dh73,000 from the National Bank of Dubai, Dh78,000 from United Arab Bank Dubai and Dh45,000 on credit from HSBC Dubai.

"When they asked me to take a loan for the company, I thought it would be just one loan, and that too for a small amount since my salary is only Dh2,000. It was only when I started getting calls from several banks, I realised the company had shown my salary as Dh10,000, and cheated me by making me sign some bank documents," said Rajesh.

Rajesh also said he was in jail for two weeks, and the company did nothing to bail him out.

Substantiating their claims were copies of letters written by the company to banks requesting them time to clear the dues.

As shown to Gulf News, the letters read: "As instructed by the employer, some of our employees voluntarily came forward to help this supermarket venture to improve its unfavourable financial position by providing funds which they took as personal loans and through their credit cards from your bank, and we utilised these funds to ease our fund crunch to a great extent."

"In view of the above circumstances, we take full responsibility to settle all the dues of our employees, and are willing to arrive at a mutual settlement with you to clear them in monthly installments."

The employees also said in many cases, salary transfers and cash withdrawals and other transactions were made from their accounts even in the absence of the account holders, some of whom were out of the UAE.

According to the employees, three of their colleagues have already been arrested, now the company has reported their names to the labour department as absconders.

"We have reported the matter to the Central Bank, and all other respective banks, and they are investigating the issue. Complaints have also been lodged with the Indian embassy and Amnesty International.

"We live in constant fear of being arrested for no fault of ours. The company is financially capable of clearing the debts and they have the moral responsibility to get us out of this mess," Rajesh said.

Legal expert: Workers 'responsible'

Ignorance of facts is pardonable. But ignorance of the law is never pardonable, said a legal expert implying that the employees are ultimately responsible for financial liabilities in their names."In my opinion, the criminal liability of dud cheques remain with the employees and no court will entertain any arguments otherwise."

"We can look at the issue in two different ways. From the criminal perspective, the criminal liability lies with the employees because no matter how they landed in the situation, they signed the cheques in good faith and convinced the banks they were capable of repaying the loans."

However, from a civil point of view, if the employees can produce documents acceptable to the court to substantiate that the company had taken responsibility for payment of dues, the banks can hold the employer also liable for the payments.

According to her, the only substantial grounds for winning the case is if the employees can prove by documentary evidence and witnesses that they were misrepresented and the company had forced them into signing documents. "In that case, they can file a case of fraud against the company. But unfortunately they will not win if they do not have strong witnesses and documentary evidence," said the expert.

Have you ever faced unfair demands from your employer? How did you react and what recourse did you seek? Do you know anyone who has suffered similarly? What action did they take? Tell us at letter2editor@gulfnews.com or fill in the form bellow to send your comments.


Your comments


I really appreciate Gulf News for publishing this type of serious matter. This is a very good lesson for all employees. First think we are expatriates and our limitations. Any documents signing before being read carefully, the rules and regulations for our safety otherwise will be trapped. If any critical documents signing before need suitable witness and keep the copies of that to prove your status..
Ajay
Dubai,UAE
Posted: August 04, 2008, 12:53

Most of us resorted working abroad because, comparatively our Country could not pay as much salaries. We opt to leave our family behind, with hopes to give them decent life; not minding the long strenous working hours. We sacrificed so many things, and yet, for what?? to be taken advantage of, for one's personal-financial gain. I pity these employees, who fell victim of their own benevolence. CAUTION: Heed always, for the world is full of trickery.
Willy V.
Dubai,UAE
Posted: August 04, 2008, 12:51

My brother who is working in a Sharjah based catering company also faced something like the same situation. The business partner of the company asked him to sign the documents to open a salary account in HSBC. But the document was to get a credit card and to take loans from HSBC bank. He refused to sign the document as I advised him to read all the documents before signing it. But four other employees signed the documents and now they are trapped. The employees requested the company to clear the loans but they are not ready to do so. There are such cases happening because the agents from the banks also helping the persons to forge the documents to get their monthly targets.
Jithesh
Abu Dhabi,UAE
Posted: August 04, 2008, 11:42

Being a safety practitioner, once there was a personnel accident causing multiple injuries and temporary disability to a worker. My employer forced me to report that the accident happened as a result of the direct negligence of the injured, indeed that was the inadequacy in the work planning and engineering aspects as well. The employer upon my resistance, threatened to end my contract but I avoided that by resigning.
Akbar
Abu Dhabi,UAE
Posted: August 04, 2008, 10:44

Agreed that the employees are aware of the laws, and the consequences of the situation. However these employes are here to work and help their families, refusal to their employer to sign these docs for bank loans could have resulted in losing their jobs and probably sent back home. Even if they had to compalin at that time to the authorities, still they would have gone jobless... Fact remains that all are guilty of this crime...
Yvonne
Sharjah,UAE
Posted: August 04, 2008, 10:29

This is outrageous! Not only were the poor souls conned into signing these contracts, the law is actually on the employer' side! The company's owner must be one crafty coward. It's up to the authorities now to make sense of this mess and ensure that non of these employees are unjustly prosecuted.
Mohammed
Dubai,UAE
Posted: August 04, 2008, 09:59

I totally agree with the legal expert that the employees are at fault. Banks in particular to this case are so ignorant that the loans are getting applied without the knowledge of Loanee and even getting approved. Signature is enough to approve the loan? The employees can get benefited to certain extent in this case if they produce the evidence that bank operated their accounts without their consents even though the person was out of the country. Is this how the banks work?
Ishaq
Dubai,UAE
Posted: August 04, 2008, 09:58

While going through the report published. I personall feel, this is absolute rubbish. All that need to be done is , a proper invetigation need to be conducted and pile up the facts together and crack this case. How come banks sleep while sanctioning a loan for a person who is getting a mere salary to 2000/2500 Dhs. Before sanctioning a loan to particular individual, there are certain documentations and screening to be done on that particular individual. If this was not properely done. then i wish the banks" ALL THE BEST"
Albert
Chennai,India
Posted: August 04, 2008, 09:52

Surely the company owners can be arrested for fraudulently obtaining these loans. Time that unscrupulous companies such as these were brought to book.
Dean
Dubai,UAE
Posted: August 04, 2008, 09:02

Instead of finding a way to arrest the culprit, making excuses by legal clauses is really bad and that is why many crimes like these still continue.A proper financial audit by questioning the assets and fund sources can easily reveal the facts.
Mathew
Kochi,India
Posted: August 04, 2008, 08:16

  • Rate this article
  • Average reader rating (0 votes) 0 Stars
Tools

Emailing an article to friend is a simple way to share a news item. Your friend will receive an email with your name and email address as well any personal message you choose to send.

The information you provide on this page will not be used to send unsolicited emails.

This service is not intended to encourage spam, and action may be taken against individuals who maliciously enter personal details of another individual.

Share this article

More from UAE General

  1. UAE combats human trafficking

  2. Ministry denies hijacking of UAE-flagged ship

  3. Saif meets special needs centre users

  4. Live hoardings: Ad a glance

All articles in General

More from UAE

Gulf News
Popular in UAE
Readers' pictures
Your pictures

Readers' pictures

The best reader pictures from around the UAE this week

Latest news
Community Reports

More from Community Reports

Weather

More from Weather