Dubai Police launch investigation into rice scam that rocked UAE logistics sector
Dubai’s Public Prosecutor has ordered an investigation of a massive rice export scam that enabled a Dubai-based shell company to steal at least AED15-million from Indian traders, reports Gulf News.
The story, which was also first reported by Gulf News, revealed major shortcomings in regulations and loopholes to which international traders are vulnerable when exporting to the city.
Several dozen Indian rice traders signed contracts with Dubai-based Al Rawnaq Al Thahabi General Trading company for the export of 6,000 tons of rice, which were held at Al Rawnaq’s rented warehouse in Al Quoz.
Al Rawnaq sent at least 23 telegraphic transfer payments amounting to AED 15.38-million to the traders, but they were subsequently cancelled after cheques issued against them bounced because of insufficient funds.
Some of the traders travelled to Dubai after failing to make contact with Al Rawnaq, but found its warehouse empty. The owner of the warehouse has also said that he has been left out of pocket as the rent cheque also bounced.
Now, Dubai’s Public Prosecutor has ordered an investigation and Farag Deifalla, legal consultant at Yousif Alhammadi Advocates and Legal Consultancy is helping traders to try and recover their money.
The Public Prosecutor has ordered Jebel Ali Police to investigate accusations of fraud against six men and two companies, including a money exchange house, for their role and alleged complicity in the scam.
One of the traders, Vipin Goel, owner of Haryana- based Kamla Rice Mills said if the exchange house had immediately submitted Al Rawnaq’s cheques to banks, they would have bounced and their corresponding TTs would have been cancelled automatically.
“Sadly, the exchange house sat on our cheques for days, giving the fraudsters enough time to receive the shipments on the basis of TT receipts, move the containers to their warehouse and then sell the ill-gotten goods at dirt cheap prices,” said Goel, who has lost at least AED 1-million.
The 6,000 tonnes of rice shipped to Dubai in 250 containers vanished between March and April this year.
Sumit Jindal of India’s KG Industries also alleges that the exchange house staff deliberately delayed the process for two weeks, allowing the suspects to receive the containers and sell off the rice before the cheques could be banked.
He has lost an estimated AED 4.3 million in the scam.
Vikas Aneja of Amritsar Riceland and Bhupinder Singh of Harman Rice, who lost AED 3.66 million between them, flew to Dubai early this week to follow up on their complaints.
“We have full faith in the UAE judicial system and are hopeful that the culprits behind this audacious scam will be brought to book,” Aneja told Gulf News.