Court acquits six of manipulating Dubai Islamic Bank share prices

Dubai: A top lawyer has called for an urgent upgrade of business laws after a court acquitted six dealers of manipulating Dubai Islamic Bank (DIB) share prices through bogus trading.

The Dubai Court of Cassation brought the DIB bogus shares case to an end yesterday when it confirmed the irreversible acquittal of six Arab suspects for manipulating the prices of DIB shares on the Dubai Financial Market (DFM) on August 27 and 28, 2005.

The Public Prosecution charged the suspects, Z.Q., K.K., UAE nationals, J.A., M.A., B.F., Jordanians, and Y.H., a Palestinian, of manipulating DIB share prices.

Trades worth Dh9.35 billion were cancelled on those two days after it was alleged that the price of shares had been manipulated.

Improvements

Following the ruling, DFM's lawyer Dr Habib Al Mulla, of Habib Al Mulla and Co Advocates and Legal Consultants, told Gulf News: "Again we respect court rulings irrespective of whether we agree with them or not. However this case proves that our commercial laws, in general, and financial laws, in particular, are in urgent need of improvement to accommodate sophisticated transactions that didn't exist when our current laws were drafted."

One of the defence lawyers Ali Abdullah Al Shamsi said: "This ruling is a triumph to the DFM and its dealers. It has undoubtedly proven that our clients' transactions were legal and clean. The court mainly based its verdict on the three-member committee's - specialised in financial markets and stock exchanges - report which ruled out any suspicion."

Y.H. will have to pay Dh20,000 for illegally trading in DFM without obtaining a licence from the Emirates Securities and Commodities Authority (ESCA). The court dismissed a Dh1 million compensation claim filed by ESCA and DFM.

The audit committee which handed its report after almost 11 months of examination said, "The claimants did not give specific definitions of the terms of legal or illegal speculations, bogus deals, formal trading and active market in their leaflets or list of regulations." None of the investors lodged complaints about any accrued damages due to the share transactions, added the report.

"Again we respect court rulings irrespective of whether we agree with them or not. However this case proves that our commercial laws, in general, and financial laws, in particular, are in urgent need of improvement to accommodate sophisticated transactions that didn't exist when our current laws were drafted."

Dr Habib Al MullaHabib Al Mulla and Co Advocates and Legal Consultants, lawyer for Dubai Financial Market