Man in Dubai jailed after he refuses to return Dh570,000 wrongly deposited in his account

Dubai Criminal Court has sentenced an Indian man to one month in jail after he refused to pay back Dh570,000 that was incorrectly transferred into his bank account.

He was also asked to pay the same amount in fines and will be deported after serving his sentence.

The transaction happened in October last year, but the verdict was given recently.

The man said he received a transfer notification and did not know where the money came from. He spent Dh52,000 to pay his rent and other bills without checking with the bank to establish who had sent the money into his account.

“I was surprised when Dh570,000 was deposited in my bank account. I paid for my rent and expenses,” the accused said in court.

“A company asked me to return the money, but I refused because I was unsure if the money belonged to them. They asked me several times.”

The money was transferred by a medical trading company.

“We have a business with a supplier company, and an employee made the transfer to their account. They complained about not receiving the Dh570,000, and we discovered the transfer was done to an account similar to the supplier's account without checking the details,” an official from the medical trading company told the judges.

The company asked the bank to return the money, but the accused refused despite knowing it had been transferred by mistake.

“The bank told us that he refused to return the money,” the official said.

The company then reported the incident to Al Raffa police station and received an order to present to the bank to get the money.

The bank froze the account, but the money was not recovered. It was not revealed if the accused had moved the money out of his account and deposited it elsewhere.

Dubai Public Prosecution charged him with obtaining the money illegally.

The man admitted the charge and asked for some time to settle the claim, but his request was refused.

He has appealed against the verdict and a hearing is expected next month.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Man in Dubai jailed after he refuses to return Dh570,000 wrongly deposited in his account

Accused has appealed against the verdict and a hearing is expected next month