Landmark penalty is corruption warning by Dubai

Lawyers say court ruling is a tough precedent as a former sales manager faces up to 465 years in jail.

DUBAI // A landmark penalty was imposed on a former sales manager yesterday, the first ruling in Dubai's drive against corruption. The ruling against the 32-year-old Emirati, who worked in Dubai Industrial City (DIC), includes three years' imprisonment for taking Dh17m (US$4.63m) in illegal commissions on sales, repayment of the illegal commissions, and a Dh17m fine.
But the ruling's toughest feature may send the loudest message: for every Dh100 he fails to pay on his fine upon his scheduled release, he faces another day in prison. AZ could face 465 years in jail if he pays none of the fine, in effect a life sentence. Dubai lawyers said the sentence was particularly tough, and may set a precedent for a series of unrelated corruption cases that will be coming before the courts in coming months.
The defendant, AZ, was accused of charging illegal commissions on the sale and lease of land at DIC, and had pleaded not guilty to the charge before the Dubai Criminal Court of First Instance on March 10. He was ultimately charged with misappropriating public funds. Dr Mohammed al Rukn, an Emirati lawyer and former head of the UAE Jurists Association, said: "He has to pay the fine as per the penal procedures law, otherwise he stays in prison. He can be released temporarily to allow him to arrange to pay the fine, but if he refuses or cannot pay, a judge can order him jailed again."
Mr al Rukn said the Dh17m fine was considered a "toughened" penalty. "In cases of embezzlement and betrayal of trust the maximum jail sentence is three years in jail, but when the charge is embezzling public funds the penalty is toughened," Dr al Rukn said. Eisa bin Haidar, another Emirati lawyer, agreed the hefty fine coupled with jail time was a tough penalty: "The penalty has to be harsh. The court's aim here is to deter others from committing such a crime since once corruption infects a society or country it can destroy it very quickly."
Mr bin Haidar said in the event a defendant did not have the means to pay a fine, he had to serve one day in jail for every Dh100 he owed in fines. AZ was accused of charging eight DIC clients extra commissions on a number of sale and rental agreements for land belonging to DIC, a member of Tatweer, Dubai's state-owned property developer. DIC was set up on 560 million sq ft of land to help spur industrial growth.
In earlier testimony to the court, the vice president of DIC, RA, said the defendant might have received as much as Dh30m in illegal payments from clients between when he started his job in June 2006 and when he was fired in July 2007 following an internal audit. Prosecutors did not say why he was charged with misappropriating only Dh17m. The defendant allegedly lied to clients that there were no more plots of land available and that he could arrange for them to acquire ones already owned or rented by other people, but that they would have to pay the current landlords a premium. The plots had not been previously sold or rented.
"Although most clients know [DIC] policy, which forbids reselling or subleasing plots, they still went ahead with these transactions," RA told prosecutors. The executive added that AZ returned Dh800,000 he illegally took from a client on his last sale before he was released by the company. The defendant is alleged to have deposited the illegal commissions into a bank account of a company registered in the names of his mother and sister.
One of his clients, identified as TK from Denmark, testified that the defendant asked for an extra Dh1.9m to purchase three plots of land at the development. TK confirmed that AZ told him the money was a commission for the previous owners of the plots. He said AZ told him the previous owners did not wish to reveal their identities. In his statement to prosecutors, the defendant said he deserved the commissions because he had generated Dh200m worth of business for the company through his personal contacts.
The defendant has 15 days to file an appeal against the ruling.
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