DUBAI // A money exchange at the centre of a row over non-payment of workers' wages has also failed to transfer expatriate remittances.
Asia Exchange has now been reported to Dubai Police, employers who have lost money have gone to court and individuals with unpaid remittances are investigating what legal action they can take.
The row began more than a month ago when companies transferred hundreds of thousands of dirhams to Asia Exchange in employee salaries, which it failed to pay out.
Yesterday an expatriate couple in Abu Dhabi who used the agency to send Dh40,000 to their account in India on May 27 said there was no sign of their money.
"We were told it would be in our account by July 3," said the husband, an engineer. "But as of now we still haven't had the money go through."
Call after call has been placed to the agency's branch in Mussaffah, but they are always told the money "will be sent in two or three days".
"Our parents and children are in India and we have a house there, which is why we have to send the money back.
"We have told them that we will accept the transfer at a lower exchange rate or if they return the money to us in instalments. But we haven't had any response."
The couple are investigating what legal action they can take against the agency if they do not receive their money soon, and have also contacted the Indian Embassy for help.
More than a dozen companies also want an explanation from Asia Exchange for what has happened to their workers' wages. The agency said initially the problem was a computer glitch, but the money still has not been paid and companies are now resorting to legal action.
Under the Ministry of Labour's Wages Protection System, employee salaries cannot be paid in cash and must be paid through a bank or an exchange bureau.
This allows the ministry to keep tabs on transactions and ensure workers are paid on time without any unlawful deductions.
Chirag Contracting in Dubai transferred Dh339,000 to Asia Exchange in salaries for its 300 workers on August 11, but the wages were never paid.
"We have so far received Dh70,000 back from the exchange," said Vinod Alora, group director of finance at Chirag. "We made a police complaint last week because the situation is ridiculous.
"We have been getting some money in dribs and drabs but have no idea when we will get the full amount back. The situation is crazy. We sent through the money more than four weeks ago and our workers are really suffering because of this."
He said the non-payment of August wages was compounded because the delay had come after a traditionally quiet period for the company.
"Many of our clients were away during the Ramadan and Eid period because of holidays, so this delay in salary payments has hit the workers hard."
Fortuna Engineering in Sharjah deposited Dh30,800 for its 28 workers at Asia Exchange on August 12.
They have also not received their money, said marketing manager Lavita D'Souza, and have filed a complaint against the centre in a Dubai court.
"It's been more than a month now and every time we contact them we get told it's a computer problem," she said.
"They keep telling us it will go through in a couple of days but then nothing happens."
She said the company felt compelled to pay their workers in cash after Eid, despite the law, because they did not want them to be out of pocket.
"We've filed a complaint against Asia Exchange in Dubai Court," said Ms D'Souza. "At the moment we have not been given a date for when it will be heard."
The company has also complained to the Central Bank in Abu Dhabi but have not yet had a response.
Asia Exchange and its parent company Ali Omran Al Owais did not respond to The National's multiple phone and email requests for comment.
nhanif@thenational.ae
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.”
Mohammed bin Zayed Majlis
What is a calorie?
A food calorie, or kilocalorie, is a measure of nutritional energy generated from what is consumed.
One calorie, is the amount of heat needed to raise the temperature of 1 kilogram of water by 1°C.
A kilocalorie represents a 1,000 true calories of energy.
Energy density figures are often quoted as calories per serving, with one gram of fat in food containing nine calories, and a gram of protein or carbohydrate providing about four.
Alcohol contains about seven calories a gram.
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