Court asked to make ‘example’ of defendants in DIB fraud case

April 07, 2010, Wednesday/ 16:39:00
The courts should “make an example of” seven defendants accused of defrauding the Dubai Islamic Bank (DIB) of $501 million (Dh1.83 billion), the prosecutor said in his closing arguments yesterday.

Khaled al Zarooni asked the Dubai Criminal Court of First Instance to impose the maximum punishment of 15 years in prison on some of the defendants, who allegedly defrauded DIB by creating fake companies and getting the bank to loan them money for non-existent projects. “These men are opportunists who have taken advantage of our free economy and market and hurt our national economy by their crime,” Mr al Zarooni said. “I urge the court not to be lenient with them and to issue its ruling with an iron fist to make an example of them.” A Turkish businessman AN, 36; several DIB senior executives and employees, CR, 48, and RL, 54, both Britons; and RU, 50, and OM, 39, both Pakistanis; an American businessman ZU, 48; and AF, 57, the British director of the property firm Plantations Holdings, were charged by prosecutors in March last year with fraud, embezzlement, bribery and forgery.

The Turkish and American men remain at large and are being tried in absentia. The five men who appeared in court pleaded not guilty. CCH, a company owned by the Turkish defendant named as one of the firms that defrauded the bank, was a representative of DIB in Europe, according to the indictment sheet.

Prosecutors believe the Turkish man and CR, who also worked for CCH, colluded with RL, who created front companies to fabricate documents and make the fake projects seem legitimate. The Pakistanis, who worked in DIB’s project-finance department, allegedly assisted in getting the loans from the bank in return for bribes. Lawyers for the defendants, five of whom have been in custody for 22 months, argued that the transactions in question were made legally by the bank and CCH, and said that DIB had accepted Plantation Holdings, which was worth $US545m, as loan collateral.

Defense attorneys also argued that DIB had not adhered to Sharia banking practices because it had charged some $30m in interest on the loans in question. Habib al Mulla, a member of the defense team, also accused a financial audit department official who was a witness in the trial with being complicit in the fraud. The defendant CR, who asked to speak before the court while holding a copy of the Quran, said that DIB and CCH had signed a payment restructuring agreement, which he presented before the court. When the presiding judge, Hamad Abdel Latif, said the court already had a copy of the document, CR replied with an accusation that DIB had intentionally concealed the details of the agreement.

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