‘Chance of getting our money back looks grim’: UAE investors lose funds to UK asset manager

The 79th Group shut its Dubai office and is under investigation for fraud in the UK

UAE investors who lost their savings with 79th Group allege the firm ran a Ponzi-style scheme. Illustration: The National

Investors from the UAE who put their funds into UK-based asset manager 79th Group are now trying to retrieve their money, after the company was placed into administration.

The company sold structured loan notes secured against properties to investors and promised high annual returns ranging from 15 per cent to 18 per cent. The company claimed it used investor funds to buy properties in distress sales, refurbish them, sell them at a profit and make payouts.

The 79th Group, which describes itself as a real estate and wealth management company, is being investigated by the City of London Police on suspicion of fraud. The company has denied any wrongdoing. Its website is down, and 79th Group closed its Dubai office, which opened in 2023, in the Dubai Multi Commodities Centre.

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Its directors are listed as David Webster, Curtis Webster and Jake Webster.

Attempts by The National to get a response from the company owner was unsuccessful.

Administrators Grant Thronton said it does not comment on individual cases. Information is provided to creditors through the statutory reporting requirements, which are lodged in Companies House in the UK, it told The National.

The company has not met DMCC's compliance requirements and would currently not be able to renew their licence, the free zone authority told The National. The company has vacated its office in the DMCC district, it added.

'It was a high-risk investment'

KR, an Abu Dhabi-based investor, said he was approached by a Dubai financial adviser who proposed the structured loan notes for investment. He invested Dh400,000 ($108,917) into the loan notes.

“It was a high-risk investment, which, unfortunately, turned out to be a Ponzi scheme. I received the first tranche of the returns, but the company defaulted before paying the second tranche and the principal amount,” he said.

KR said he knows of people in the UAE who have lost millions of dirhams

“Our investor group has reported this to Action Fraud [the UK's national reporting centre for fraud and cybercrime]. We also reached out to banks to see if they can recall the funds from the receiver bank, but we did not get a satisfactory response.

"We then elevated the issue to Sanadak, the UAE Central Bank’s ombudsman body, but the response was not optimal. The receiver bank said the funds had been frozen since the company was placed in administration.”

SS, a Dubai-based investor, was introduced to structured loan notes from the 79th Group by a financial adviser. Although he recognised there was risk involved, he transferred Dh50,000 to the company's local bank account to buy the product.

“I was offered 16 per cent, to be paid across two tranches on a half-yearly basis. But I didn’t receive my first tranche of interest payment,” he said.

“Getting the money back looks very grim. Unfortunately, from the latest updates from the administrators, it looks like they have a zero balance or negative balance book.”

Legal hurdles

“Administration is a formal insolvency procedure under UK law. When a company is placed in administration, control of the company passes from its directors to licensed insolvency practitioners [the administrators],” says Ahmed Kamran, associate at law firm BSA.

“The main objectives are to rescue the company as a going concern, achieve a better result for creditors than immediate liquidation, or realise property to make a distribution to secured or preferential creditors.”

Once in administration, the company’s assets are protected from legal action by creditors. The administrators assess the company’s assets and liabilities and attempt to maximise returns for creditors, Mr Kamran says.

Creditors must submit claims to the administrators, who will then determine the validity and amount of each claim, he adds.

Recovery is often challenging in these situations, according to Mr Kamran.

How to submit a recovery claim

UAE investors should contact the administrators as soon as possible to register themselves as creditors and to receive updates on the process. They will need to submit a formal claim to the administrators, he instructs.

“This document details the amount owed and the basis for the claim. Supporting documentation, such as investment contracts and correspondence, should be included,” Mr Kamran says.

“The administrators are required to keep creditors informed about the progress of the administration, including the likelihood and timing of any repayments.”

He suggests investors can form groups and potentially pursue collective legal action. This can increase leverage and reduce costs.

Mr Kamran says the likelihood of fund recovery depends on several factors, including the value of the company’s remaining assets, the total amount owed to all creditors, and the specific terms of the investment.

He says the UK insolvency law sets out a strict order of priority for repayment. Secured creditors with fixed charges have security over specific assets and are paid first from the proceeds of those assets.

In cross-border investment fraud and insolvency cases, the administration process may result in minimal or no recovery for unsecured creditors, so a “more fruitful” strategy is to pursue legal claims against third parties who may have facilitated or endorsed the scheme.

This includes regulated financial advisers, unlicensed introducers, promoters and marketing firms, corporate service providers, legal or compliance consultants involved in structuring or distributing the products, Mr Kamran says.

“These third parties may be civilly liable for misrepresentation, negligence, breach of regulatory obligations, or knowing participation in fraudulent schemes,” he says.

Red flags

It can be difficult to identify red flags if you are not an experienced investor or dealing with a new market, according to Carol Glynn, founder of Conscious Finance Coaching.

“Many investors are drawn in by the fear of missing out or the desire to secure their financial future, especially in locations like the UAE, where there’s a high expatriate population seeking ways to grow wealth without traditional pension systems,” she says.

Alison Soltani, founder of Leap Savvy Savers, warns that the biggest sign to watch out for is the promise of high and unrealistic returns.

“Another sign to be aware of is when terms and conditions are not clear and transparent. Any fees levied on you should be outlined clearly, and you should be able to ask questions of the company and receive clarity in the response you are given,” Ms Soltani recommends.

“Finally, if a sense of urgency is placed on you to part with your money, this is a major red flag. Fraudsters want you to transfer your money before you can think too logically about the situation and evaluate the company.”