Customers of Dubai firm Gold AE to start legal proceedings over access to accounts

About 200 parties, with claims against the company that total in excess of US$25 million, were preparing legal cases against Gold AE after they were unable to access their cash or accounts.

Customers of the precious metals trader Gold AE had hired lawyers to start legal proceedings against the company over being unable to access their cash and precious metal accounts months after the firm ceased trading.

A group of Gold AE customers, who have been unable to retrieve either cash or metals from the company since late October, are set to formally launch legal proceedings against the company, one customer told The National.

The customer, who asked not to be named, said about 200 parties, with claims against the company that total in excess of US$25 million, were preparing legal cases against Gold AE.

“We are a group of around 200 victims, so 200 families have been affected by this fraud. Most of us have put all of our life’s savings into this online gold shop and are totally depressed and disappointed,” said the customer.

“It is very important for us to get justice, especially if Dubai is planning to be true to its image of being ‘city of gold’. If not then people will lose around $25m and people will think twice about investing their hard-earned money here ever again.”

He did not comment on where the first legal claim will be filed, or how many parties will be party to the initial suit.

Gold AE customers have been unable to access their accounts since late October, when company representatives ceased official communications with customers.

The company’s trade licence was terminated a month later by the Dubai Multi Commodities Centre, following an internal investigation into fraudulent activity.

Gold AE subsequently told customers in an email in December that it “does not have any legal authority nor official access to the assets, funds and commodities that can be appropriately used to reimburse the clients their investment holding with Gold AE”, which it blamed on the “mishandling of funds and the disappearance of the previous management”.

The company said that it was pursuing criminal action against the former Gold Holding chief executive Mohammed Abu Alhaj and two other executives. Gold Holding is the parent company of Gold AE.

Dubai police last month arrested three senior Gold Holding executives, police sources said. The exact charges levelled against them were not confirmed.

Mr Abu Alhaj last year launched legal action against Gold Holding’s chairman in the DIFC Courts, alleging non-payment for a transfer of shares in Gold Holding, causing the company to lose $200m worth of contracts, and slander.

A judge in the DIFC Courts this week struck out the claims for loss of contracts and slander, but said that the court would hear the claim of outstanding payment for the shares.

Mr Abu Alhaj said that he intended to appeal against the judge’s decision.

Officials at Gold Holding and Gold AE could not be reached for comment.

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