Longest jail term in corruption inquiry

Awad Mustafa

• Last Updated: November 04. 2009 10:17AM UAE / November 4. 2009 6:17AM GMT

DUBAI // As one judge handed down the longest prison term yet in the emirate’s long-running corruption inquiry yesterday, other judges were considering a ruling that could dramatically increase the potential sentences of many others on trial.

CT, a British senior manager at Istithmar World, the overseas investment arm of Dubai World, was sentenced to five years in jail and ordered to pay almost Dh10 million (US$2.7m) in fines and restitution after being found guilty of embezzling $1.34m (Dh4.9m).

Meanwhile, appeals judges in the Sama Dubai fraud case were considering whether employees of state-funded companies could be tried as public officials. If they rule that they can, it would leave the defendants in a number of corruption cases open to markedly heavier sentences if found guilty.

CT was accused of purchasing stocks for Istithmar from a British horse brokerage company that he owned, then pocketing a portion of the funds.

Abdel Wahid Abdel Rahman, 31, a board member of Dubai World, told prosecutors CT had been hired to head Istithmar’s risk assessment department. He was asked to establish procedures to combat and prevent fraud within the company.

“In 2008 God sent us an angel to alert us of the fraud taking place by the person entrusted to prevent it,” Mr Abdel Rahman said in Dubai Criminal Courts.

He testified that company investigators discovered CT had signed agreements to purchase stocks worth £2 million (Dh12.11m) from Newland brokerage, a British company.

“Newland brokerage is a British-based horse buying firm and the defendant purchased stocks in the name of Istithmar, which he is not entitled to do,” Mr Abdel Rahman said.

“Our investigations revealed that CT transferred $1.3 million to his account after the agreements were done. Furthermore, we found out that the company in the UK belonged to him and he was its managing director.”

Judge El Saeed Bargouth ordered CT to repay the $1.3m and fined him the same amount. He further ordered that CT be dismissed from his position, as he is viewed as a public official.

CT has two weeks to lodge an appeal.

Meanwhile, in the Sama Dubai case, Abdel Rahman al Memari, testifying for the prosecution, said the acquittal of Dubai Lagoons’ former chief executive, AM, was based on his not being a public official, while actually he was.

AM, a 42-year-old Emirati, was charged with breach of duty and accused of requesting from one of his company’s clients five apartments worth Dh2.7m and Dh200,000 in cash. He was acquitted on July 29.

Yesterday, Mr al Memari told the appeals court the acquittal had resulted from AM being tried as a private company employee, which meant he broke no law in taking unsanctioned commissions.

The prosecution argued that because Sama Dubai was ultimately funded by Sheikh Mohammed bin Rashid, the Ruler of Dubai, AM should have been tried as a public official and there was a legal requirement for commissions to be approved by the company.

Mr al Memari said the Dubai Lagoons project was owned by Sama Dubai, which is owned by Dubai Holdings, which in turn is funded by the Ruler. Therefore, he argued, funds involving Dubai Holdings were public.

“In our evidence we provide documents that show Dubai Holdings depositing Dh2 billion into the emiri account of HH Sheikh Mohammed,” he told the court.

He said funds that went into the emiri account were reinvested in education, infrastructure and municipal projects, which made them public funds.

Mr al Memari said all five defendants were public officials.

The prosecution asked the panel Judge Mustafa al Shennawi, Judge Saeed bin Sarm and Judge Mahmood al Sharshabi to confirm with the Ruler’s Court whether the defendants were considered public officials.

Mr al Memari also asked the judges to consider the testimony of Mohammed Mustafa Hussein, the director of the Financial Audit Department, who is the chief investigator and star witness in the Dubai fraud trials.

The court also heard the appeals of four people who were found guilty in the trial that acquitted AM three Dubai Lagoons sales executives and a Damac manager who were convicted of taking bribes over the sale of land belonging to Sama Dubai.

MA, 41, Sama Dubai’s sales manager, and NQ, 23, a sales adviser, were found guilty of revealing company secrets. MS, a 28-year-old executive, was found guilty of delivering the bribe and aiding and abetting the crime.

AH, a 32-year-old Syrian who was Damac’s property development director, was found guilty of accepting Dh650,000 in bribes.

In July, the three executives were sentenced to a year in jail and ordered to repay Dh1.36m each.

AH was sentenced to a year and ordered to repay Dh650,000.

The court granted bail to all five defendants and was adjourned until November 17.

amustafa@thenational.ae