From ArabianBusiness 25 June 09
The Gulf News has a fuller explanation of the current bankruptcy laws in the UAE.
And to confirm what's in the following article, in Dubai you can be jailed for bouncing a cheque and unbelievably there is no system in place here for the person who's written the cheque to put a stop on it.
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Lawyers on Thursday called for a review of UAE bankruptcy laws, after the owner of a Dubai gifts company fled the country with massive debts.
It emerged on Wednesday that Simon Ford, the owner of an events and alternative gifts company BlueBanana.com, had left the UAE after his firm became insolvent.
In an emotional letter to suppliers and customers Ford said that the UAE’s "lack of structured bankruptcy laws and a banking system which has zero flexibility on loan repayments" had forced him to flee the country.
But legal experts have now called for an overhaul of bankruptcy laws in the UAE-and urged a review into whether a bounced cheque should be a criminal offence.
“There have been discussions amongst lawyers and accountants as to the need for modernisation of the UAE insolvency regime," Raza Mithani, a senior advocate at law firm Al Tamimi told Arabian Business.
"The areas which are probably in most urgent need of review are the enactment of detailed provisions dealing with individual (non-trader) and cross-border insolvency, together with improved legislation to better facilitate the rescue of businesses in financial distress."
“A corollary to this would be a review of the law relating to bounced cheques and whether it is appropriate for it to continue to attract criminal sanction,” he added.
Currently there are no bankruptcy laws for ‘non traders’, which would include consumer bankruptcy cases such as employees of companies.
Mithani added: “There is also a need to encourage awareness of the legislation that already exists. This would enable businesses in difficulty to consider their options at the earliest possible opportunity. Such options may, depending on the circumstances, include entering into a formal or informal composition with creditors."
Showing posts with label bankruptcy. Show all posts
Showing posts with label bankruptcy. Show all posts
Friday, 26 June 2009
Thursday, 25 June 2009
BlueBanana boss on the run
The owner of an events and alternative gifts company in Dubai has written an emotional letter to customers and suppliers after fleeing the country on fears that UAE bankruptcy laws could land him in jail.
Simon Ford, the owner of Blue Banana.com, apologised in the letter for leaving the country after the firm’s debt had grown “exponentially”, but pledged to repay every last dirham of its debt.
“Tragically, the debt of the business reached a level on Thursday June 18 that personal threats were being made against me and my family, which left me no choice but to leave four years of passion behind and take my family out of the country,” he said.
“I am not running away from debt, I am purely protecting those dearest to me and getting out of a country which, due to the lack of structured bankruptcy laws and a banking system which has zero flexibility on loan repayments, drives people to make horrible decisions.”
Through its website, Blue Banana sold alternative gifts such as skydiving and jet fighter flights.
Its online marketing business was the online ticketing partner for the Dubai Pro ARCH Trophy cricket tournament this year.
“I am not trying to justify that what has happened [or say it] is morally correct, it most certainly is not, but there is a very stark reality in doing business in UAE which unfortunately results in the most horrible decisions having to be made,” Ford said.
“On a personal level, I have been through the most soul destroying and emotionally horrific four days of my life, and am likely to continue to do so for some time as my integrity is repeatedly called into question and rumours of me stealing people’s money, amongst other accusations, grow out of control.”
In a separate statement, an investor in the company, Nazar Musa, described the company’s management style as “over optimistic”.
Ford said in his letter that he has set up an e-mail account for people to contact him with regard to outstanding payments, and that he would “proactively contact” all those owed money by the company within the next 48 hours.
“I am sorry, Dubai,” he said.
The company's website has been closed down and efforts to call someone on the telephone listed for the firm were unsuccessful.
Simon Ford, the owner of Blue Banana.com, apologised in the letter for leaving the country after the firm’s debt had grown “exponentially”, but pledged to repay every last dirham of its debt.
“Tragically, the debt of the business reached a level on Thursday June 18 that personal threats were being made against me and my family, which left me no choice but to leave four years of passion behind and take my family out of the country,” he said.
“I am not running away from debt, I am purely protecting those dearest to me and getting out of a country which, due to the lack of structured bankruptcy laws and a banking system which has zero flexibility on loan repayments, drives people to make horrible decisions.”
Through its website, Blue Banana sold alternative gifts such as skydiving and jet fighter flights.
Its online marketing business was the online ticketing partner for the Dubai Pro ARCH Trophy cricket tournament this year.
“I am not trying to justify that what has happened [or say it] is morally correct, it most certainly is not, but there is a very stark reality in doing business in UAE which unfortunately results in the most horrible decisions having to be made,” Ford said.
“On a personal level, I have been through the most soul destroying and emotionally horrific four days of my life, and am likely to continue to do so for some time as my integrity is repeatedly called into question and rumours of me stealing people’s money, amongst other accusations, grow out of control.”
In a separate statement, an investor in the company, Nazar Musa, described the company’s management style as “over optimistic”.
Ford said in his letter that he has set up an e-mail account for people to contact him with regard to outstanding payments, and that he would “proactively contact” all those owed money by the company within the next 48 hours.
“I am sorry, Dubai,” he said.
The company's website has been closed down and efforts to call someone on the telephone listed for the firm were unsuccessful.
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