Boom fund accused of Dh847m fraud

Complaints come from 3,458 investors about an allegedly bogus investment portfolio.

DUBAI // An allegedly bogus investment portfolio run by Abid al Boom, an Emirati businessman, owes investors Dh847 million (US$230.6m), prosecutors revealed yesterday. "We have received, to date, complaints from 3,458 depositors [investors] and counting. My office has been busy answering calls from depositors. We have referred the case to the Dubai Ruler's Court, where auditors will examine al Boom's accounts to determine where all the money has gone," said Yousef Foulaz, the chief prosecutor for Deira First District.

"Most people who invested their money to improve their financial situation are of limited income, among them those who took out loans, who planned to get married and who invested their inheritance, so this has had a negative impact on them all. "As public prosecutors, we represent the interests of society at large and we will not be lenient with any of the accused. We have been receiving calls around the clock."

The total value of Mr Boom's assets seized by the authorities - Dh150m to Dh200m - barely covered 15 per cent of the Dh847m owed, Mr Foulaz added. The news comes as Dubai's markets continue to suffer amid a series of investigations into corruption in the city's property and finance sectors. After receiving numerous complaints from investors in Mr Boom's investment portfolio earlier this year, the Dubai Attorney General, Essam Eisa Humaidan, ordered Boom's arrest and that of seven others, including his brother, Khalid.

Mr Humaidan also ordered the closure of the offices of Al Boom Holding LLC, and Abid Al Boom Management and Development Properties, the suspension of trading in shares owned by the accused and the freezing of all assets belonging to them, including any real estate and bank accounts, to secure investors' rights. "Our primary concern is that depositors get their money back. Al Boom asked us to give him back his mobile phone so he could make a few calls and promised he would get back money he has abroad, so we did as he requested and we allowed him to meet with his lawyers. To date, however, he has not kept his promise to return the money, but I am still hopeful we can recover the money," Mr Foulaz said.

Three Somali women, employees of Mr Boom who were arrested in connection with the case, were released on bail, while five others remained in custody. Mr Foulaz said a Malawi national, an Egyptian and an Emirati, all business partners of Boom, were also arrested and remained in custody. "We will wait for the expert's report from the Ruler's Court, which will tell us exactly what commercial activities al Boom was involved in. In view of the sheer number of depositors' complaints, going through all the company documents and records could take some time," he said.

"We would also have to see if al Boom actually made payments to some of his depositors and how much money has been paid." The prosecution only registers a complaint officially if the plaintiff has the documentation to back up his claim. "We received many more complaints from people who came to us claiming they had deposited money with al Boom, but did not have a receipt. We could not proceed further on those complaints."

Mr Boom could not be contacted yesterday for comment. @email:[e-mail]