Tuesday, 29 September 2009
Dubai i-mate 'fraud' will run to $15m
An alleged fraud which has been blamed for the collapse of UAE-based smartphone maker i-mate’s Dubai business operation will run to about $15m, CEO Jim Morrison said on Monday.
“This is the first time I have ever wanted to murder someone. Eight years of my life I put into this. Personally I have lost about $6m, cash,” Morrison told Arabian Business in a phone interview.
Morrison, who left Dubai for the UK last Thursday, claimed a board member was to blame for the company's demise but added that no i-mate employee has been formally charged with fraud.
All 40 of i-mate’s employees in Dubai – the company’s headquarters – will now lose their jobs, he said.
Earlier this month they were told to take two months unpaid leave.
Morrison said the alleged fraud was committed after he left Dubai to work in the United States in March to be closer to both Microsoft and the US military, whom he said were interested in a new product being developed by i-mate.
Asked if he had any contact with the former employee he blames for the firm's downfall, Morrison said: “Not except for him greetin (crying) on the phone and pleading that I don’t put him in jail. Apart from that, no.”
i-mate, which had 120 staff around the world, has been hit over recent years by both the global economic downturn and the arrival onto the market of the iPhone and Blackberry devices.
Three years ago, Morrison said, the company sold 200,000 handsets a year in the Middle East.
“This year we would have been lucky if we had done 40,000,” he added.
However, he denied the company’s closure was inevitable irrespective of the alleged fraud.
“You could say the company is worth nothing now. At its height, three years ago, it was worth $750m. I would say the downturn had nothing to do with our failure. It’s quite simple, if you know you’ve got no cash in Dubai, then you’ve got a very limited period in which to get cash. And if you don’t, all of your creditors come knocking on the door and that is it,” Morrison said.
“If I had the cash, or I had another month or two months to get the cash, I would have been ok. So it is not to do with the recession, because we had corrected from the recession,” he added.
As a result of the alleged fraud, Morrison said, i-mate fell behind in its obligation to pay its staff their salaries on time. He added that as a result, many members of staff had their bank accounts frozen and at least two were arrested for non-payment of loans.
He claimed i-mate’s salary commitments could have been met if money paid to the company by electronic goods retailer Sharaf DG had not been taken as “ransom” by disgruntled employees.
“What happened is we sold products to Sharaf DG, and we had AED2.6m coming in, which more than covered the salaries, but it was coming in a week late, and that is what kicked it all off...The sales guys who were responsible for Sharaf DG went and collected the cheques and then held them out to ransom, saying ‘paying me all my money and my gratuities and everything and I will give you your cheques,’ which of course we couldn’t do.
"So now the money is all locked up in court, because we have to do court action to get new cheques issued, and cheques cancelled and whatnot.”
Asked if i-mate would reopen, Morrison said it would not, adding that once the company had been legally wound down he would look to open a new company in Dubai. He said he did not expect to get the money back he alleges i-mate has been defrauded of.
“If Dubai wasn’t set up in such a way that the banks are so aggressive and put people in jail, and your only defence is a court case, the Dubai office would have come through this ok. There’s no protection. I even spoke to the banks, and I asked why they are like this, and they said it is because so many people just leave the country, so as soon as they get an indication of it they have to act or they’ll lose a fortune.
"It is well-publicised that people drive to the airport and just leave,” he said, adding that he was still free to come and go from Dubai as he pleased.