Dubai: Some UAE residents have become victims of the ongoing shutdown of operations at UAE Exchange Centre, with their funds getting stuck for two weeks and more after remitting. Now, with the UAE Central Bank conducting an investigation into UAE Exchange activities, these customers are hoping there will be a swift resolution to their problems.
Michael D. is one of the residents facing this issue - he had wired just over Dh19,000 on March 12. But on March 15, when the funds were still not credited to his overseas account, he made the call to UAE Exchange.
“I was informed that it will likely take longer to forward my funds to the beneficiary and that, instead, I should process a cancellation whereby the funds would be transferred back in 3 to 4 working days,” said Michael D..
“They advised that this was due to technical issues they were experiencing and no further details were given. I agreed that this could well be the best course of action - so a cancellation request was initiated.”
It didn’t get any better after that.
“Having heard nothing after the 4-day period, I once again called customer service only to be told the same thing,” said Michael. “I asked to speak to a manager and was then informed that the UAE Central Bank had frozen all transactions pending company investigation, and that at least an additional week would be required to process them.”
Michael D. is not the only one to be facing this issue with UAE Exchange. Online portals are rife with others who have gone through the same experience and awaiting some clarity on when their funds would reach the intended party. Or at the very least, get transferred back to them.
Investigations still on
The UAE Central Bank has not issued an update on where the investigations stand or when UAE Exchange will restart operations. UAE Exchange, before this crisis erupted, was the biggest name in the local remittance space - apart from individual fund transfers, it also had a key role in handling corporate transfers, which was where it derived a significant share of their past revenues and profits.
But amidst all this turmoil, UAE Exchange’s parent company Finablr still found time to confirm a new CEO - Bhairav Trivedi. He replaces Promoth Manghat.
An internal investigation found that about $100 million worth of cheques were issued of whose existence the Board of Directors had no previous knowledge. These cheques “may” have been used as security for financing arrangements for the benefit of third-parties, Finablr said in a March 16 statement on London Stock Exchange.
In another subsequent statement, Finablr also said it was appointing a consultancy to look at possible insolvency proceedings.
Caught in a bind
None of these would be reassuring for Michael D. and other UAE Exchange clients who had decided to remit through the currency exchange house. And Michael D. is still waiting for an answer.
“To date I have not heard anything from UAE Exchange - and no funds have been received in my account,” he said. “While I understand that there is a global pandemic going on, it is frustrating that I have trusted the company with my money and there is no recourse or communication from the company to advise what is really going on.
“This was from savings I had accumulated over the course of 6 months and was intended to support my retirement fund. Looking at the current status of the economy, I would intend to use this as security now.
“It seems that status updates are not being communicated to the customer support team, so nobody knows or trusts what is happening with their money.”
“Gulf News” approached UAE Exchange Centre for an update on client funds currently stuck because of the investigation. But there has been no response so far.
What’s the recourse?
The issue of UAE Exchange Centre and stuck client funds were also put to the UAE’s foreign exchange remittance group, but was informed that the Central Bank is the only entity that can provide clarity.
“Impacted clients should try the Central Bank helpline… that’s the best solution,” said an industry source. “There has been talk about UAE Exchange having a shortage of funds and that its banks are being extremely strict with it. But that’s something UAE Exchange or Finablr management should clarify.”
The new CEO, Bhairav Trivedi, could be the one to do so. UAE Exchange clients will definitely need some reassuring.
“There are reportedly cases where funds that were remitted as far back as February are still waiting for the transactions to be processed,” said another customer of UAE Exchange. “It’s time customers were provided an answer.”
For a company that’s mentioned the “insolvency” word, there are obviously far more pressing matters to work on. The Finablr management will also need to search around for a new auditor, after E&Y quit its role citing several concerns related to Finablr and its sister company, NMC Health.
But ironically, E&Y is still the official auditor for NMC Health, which in recent weeks has been telling the markets that it had come across never before revealed debts of $4 billion plus. That’s quite a gap with its officially audited financial results for the first six months of 2019, when it showed debts of more than $2 billion. It’s combined exposure to banks and other institutions now stands at $6.6 billion.
NMC’s current Board of Directors had reiterated that the existence of these additional loans were not known to them until now. Clearly, as its auditor E&Y too was in the dark about these funds.
NMC Health officials declined comment on whether E&Y is still mandated to go over the company’s books, or whether the latter has resigned the account.