Investors hoping to recover funds lost in Dubai foreign exchange trading scheme

DUBAI // Investors thought to have lost millions of dirhams in a Dubai foreign exchange trading scheme are clinging on to the hope they could recover some funds from a successful legal case.

Several investors have submitted legal documents to Dubai courts appealing for a judgement that could increase their chances of recovering some of their cash.

Exential Group in Dubai Media City was ordered to cease trading in July by the Department of Economic Development following scores of complaints by clients that due payments had dried up.

The company promised annual returns of up to 120 per cent, but investors who have tried to close their accounts remain unpaid.

Dubai courts are evaluating documents submitted to assess the validity of any claim, and have called in financial experts to ascertain if a fraudulent act has been committed.

One investor, LA, has abandoned all hope of recovering her cash as she can’t afford legal fees that are expected to start at around Dh7,400.

“I and other friends visited the police headquarters, but we were turned away as they said there were too many people opening cases against Exential Group and I should open a case in court,” she said.

“I did not wish to spend further money on legal fees if the company then went bankrupt, or left the country.

“I had friends who opened cases in court, but it appears highly unlikely they will get any money back.”

Each account required a minimum $20,000 (Dh73,500) to open, so for many who have already lost thousands of dirhams, legal fees are unaffordable. Exential investors are hoping a similar outcome will be found to the conviction and settlement of property magnate Abed Al Boom.

Al Boom was convicted in 2011 of embezzling almost Dh1bn from thousands of investors and was sentenced to more than 900 years in jail.

A special judicial committee was established and began distributing the money this month from Al Boom’s liquidated money to creditors and investors whose claims had been approved.

Lawyers acting on behalf of Exential Investors have warned it could be a long process to recover lost funds.

Mohammed Al Dahbashi, managing partner of MAD Advocates, is representing several clients.

“When someone calls you up and tells you there is a company with several thousand investors not willing to repay a few thousand dollars, you think there must be something behind it,” he said.

“When we realised hundreds of people are in the same position we knew there was a serious issue.

“Our aim is to give something back to the economy, as the majority of investors had their lifetime savings tied up in this group.”

Mr Al Dahbashi has advised any other investors who claim to have lost out to keep a record of all of transactions made, and warned them not to sign any new contracts offered by Exential.

“If we can get information that this money has been taken out of the country after a court judgement is made then we can get relevant authorities involved,” Mr Al Dahbashi added.

“If we can identify where the money is, we could apply for an order from Central Bank to show where the money has gone. If someone has come to Dubai, stolen from a thousand people and taken the money elsewhere, then governmental authorities may get involved.

“In the Al Boom case, the government froze accounts so a full investigation could be done.

“We are hoping they will take similar action here. Once a group of judgements have been collected, it becomes a stronger claim.”

Advocates are asking investors they are representing to submit documents proving when the payments were made and the investment agreements that show the 21 day notice period to make any repayments.

“The Court currently reviewing the cases will either be convinced by our claims and issue a judgment accordingly, or will rather appoint an expert in the field to review the case file and provide his professional opinion on the entitlements of the investors” added Ala’a Momtaz, an associate at MAD Advocates gathering evidence on behalf of clients.

“This could take months.”