Dubai i-mate 'fraud' will run to $15m

i-mate founder Jim Morrison in happier days

Source: ArabianBusiness.com
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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.

i-mate closes in Dubai due to "major fraud"

Source: ArabianBusiness.com
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The CEO of smart phone maker i-mate on Wednesday spoke out over the company's troubles in Dubai and insisted that the business and brand will continue to live on.
Employees at i-mate's Dubai operation were made aware of the company's financial plight earlier this month.
They were initially told to take compulsory unpaid leave, but last week i-mate's office in Dubai Internet City was closed and phones went unanswered.
Jim Morrison, who founded the device maker eight years ago, said the company had run into difficulties after uncovering a "major fraud" committed by a senior employee within the organisation.
Morrison said the fraud was discovered at the end of August and the case is now with the police.
"This all happened just before we were launching [a new device range]. We produced all the paperwork, we have the devices and so we have to sort this problem first," added Morrison.
He said the company was still committed to launching its new range of smart phone products and would offer new contracts to retailers if required.
Morrison said the situation had made it difficult for i-mate to pay staff on time and led to around 30 of its 40-strong workforce being laid off.
It is understood that some former employees are considering raising their dispute with local authorities, which Morrison admits would make it difficult for the company to do anything with its Dubai operation for now.
However, he insists that "everything about i-mate will continue".
He said: "We are keeping the brand, we are putting out products, and we will be looking for more funding of course. There is a lot of good stuff happening."
Morrison, who is currently in the UAE but is normally based in the US, said that it was still too early to say if the office in Dubai would eventually re-open.
However, he said the company still continues to operate in other markets around the world and would seek to maintain customer relationships in the region even if it meant serving the market from elsewhere.
i-mate is preparing to release a statement with further details this afternoon.