Aalima Nowhera Shaikh Image Credit: Supplied

Dubai: What are the odds of Heera Group investors in the UAE recovering their money? If the experience of other recent Ponzi scheme victims is anything to go by, then the chances are remote.

Statistics show that Ponzi scheme victims seldom recover their investments and on the rare occasion they do, it’s only pennies on the dollar.

Hundreds of UAE investors have been left in the lurch following the arrest of Heera Group’s managing director Nowhera Shaik in India earlier this month.

Shaik, 45, the title sponsor of a cricket league in the UAE last year, has been charged with cheating, criminal breach of trust and criminal intimidation for peddling Ponzi schemes as Halal investment programmes.

Even as investigators attempt to fathom the scale of the fraud, the question uppermost in the mind of UAE investors is: What should they do next.

Advocate Saad Mohammad Salman of Mohamed Salman Advocate and Legal Consultants said victims can either lodge a formal police complaint or hire a lawyer to press criminal charges against the company’s branch office located in Jumeirah Lakes Tower.

Civil suit

”However, criminal charges won’t be enough to recover the money. A civil suit would also have to be filed. It’s an expensive proposition as the claimants have to pay a deposit of 6 per cent of the total claim, or the maximum cap of Dh40,000. They also have to factor other expenses like legal fees, cost of translation etc. So yes, the road ahead is fraught with challenges,” he said.

Ashish Mehta, founder and managing partner of law firm Ashish Mehta & Associates said investors should be ready to follow the legal course.

“That said, they should be realistic in terms of recovering their investments. It is assumed that the people invested in a legal entity and did not give money to an individual. If Heera Group is not licensed by UAE authorities to raise funds from third parties and yet doing non-regulated business, then it is unlikely it would have placed any financial guarantees/deposits with the regulatory body in the UAE. If this is the case, then investors can’t stake claim for the guarantee money. Also, if the limited liability company doesn’t have any assets, then investors should evaluate whether they want to initiate a civil claim against the company. Investors may also consider filing criminal charges against the office bearers of this limited liability company if there are grounds to accuse them of cheating, fraud and, perhaps, breach of trust. However this matter needs to be studied in detail by a legal practitioner first.

Premeditated schemes

Dubai-based lawyer Yasmine Khan said the chances of recovering money lost to “premeditated schemes” are slim. “However taking precautions and doing due diligence could assist in identifying the perpetuators and exposing them,” she said.

Meanwhile, Central crime sleuths in India have filed a petition seeking 14-day custody of Shaik who is also the founder of a political party called Mahila Empowerment Party (MEP). According to police, she started the Heera Group of Companies by collecting deposits in 2010. Investors were promised 36 per cent annual returns.