Bribery arrest in Deyaar inquiry
Mohammed Aly Sergie
- Last Updated: June 05. 2008 10:06PM UAE / June 5. 2008 6:06PM GMT http://www.thenational.ae/article/20080605/BUSINESS/556913803/-1/ART
Dubai Islamic Bank is ranked fifth among UAE banks in terms of assets and shareholder equity. AFP
Rafatul Islam Usmani, a former vice president of finance and structuring at Dubai Islamic Bank Group, has been arrested on charges of bribery, as police broaden the scope of their fraud investigation into the bank’s real estate affiliate, Deyaar Development, police and legal sources said yesterday.
Police confirmed that they were holding Mr Usmani, a Pakistani national, but did not comment on whether the crimes were related to the Deyaar inquiry.
A legal source involved with the arrest said: “The public prosecutor has broadened the scope of the Deyaar probe to include the entire structure of Dubai Islamic Bank.”
The bank did not provide comment.
Dubai Islamic Bank is ranked fifth among UAE banks in terms of assets and shareholder equity. Its major shareholders are the Dubai Government, with a 30 per cent stake, and the Federal Government pension fund, with a four per cent share. The rest is publicly traded on the Dubai Financial Market.
The bank owns 41 per cent of Deyaar, one of Dubai’s largest property developers.
In late March, Zack Shahin, the chief executive of Deyaar, was detained for suspected breach of trust and fraud. Mr Shahin has said he was innocent.
Two more executives linked to Deyaar were also arrested as the investigation progressed. Dubai Islamic Bank and Deyaar have both replaced senior managers including their chief executives since then.
Mohammed Ibrahim al Shaibani was appointed as the new chairman of Dubai Islamic Bank in March, and sources say he is tasked with a complete audit of the bank and Deyaar.
Mr Shaibani also serves as the director general of the Court of Sheikh Mohammed bin Rashid, the Vice President of the UAE and Ruler of Dubai, and is the chief executive of Investment Corporation of Dubai, one of the emirate’s sovereign wealth funds.
According to the defence lawyer, Tony Maalouli, Mr Usmani was arrested and detained a week ago. Police removed computers from his house after arresting him, he added.
Mr Maalouli said police told him that his client had been detained as part of the wider Deyaar investigation. The case was dealt with confidentially because the public prosecutor deemed it a matter of national security, Mr Maalouli said.
The Deyaar investigation was one factor behind Merrill Lynch’s decision to downgrade Dubai Islamic Bank from “buy” to “neutral”.
Dubai Islamic Bank was established in 1975 in the early days of Islamic finance, and has grown in prominence in the past three decades as Muslim investors and consumers transferred some of their wealth to sharia-compliant institutions.
* Sarmad Khan contributed to this report