Scandal-hit Dubai Islamic Bank seeks fresh start : The Peninsula

By Simeon Kerr

Dubai Islamic Bank claims to be the oldest Islamic bank in the world, but it also has a history punctuated by scandal. Its new management hopes the referral of seven defendants to court this week for allegedly participating in a scheme to defraud the bank of more than $500m will end the latest period of uncertainty, which has revived awkward memories of the past.

“We are pleased to close this chapter,” Abdulla al-Hamli, chief executive, said in a statement on Tuesday. The embezzlement case centres on CCH, an Islamic trade finance company, which received financing of about $440m, of which the bank says it provided about $330m. DIB has made provisions of $135m related to this transaction.

The seven defendants - mainly British and Pakistani nationals - are either linked to CCH or were former employees of DIB, and are accused of taking bribes to facilitate the alleged fraud.

DIB also says it has foreclosed on The Plantation, a polo-themed real estate development, which was being developed by one of the defendants in the case. It is also pursuing other assets and receivables in a range of countries. The bank says provisions and collateral already foreclosed or which it is pursuing will be enough to cover its CCH exposure.

“DIB remains a solid and trusted financial institution,” Khaled al-Kamda, group managing director, said in the statement.

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