Lehman-hit UAE investors blame banks |
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Thursday, Oct 02, 2008
Gulf News
Dubai: A large number of UAE investors, who lost the money they invested in Lehman BrothersLehman Brothers
capital protected notes and face huge financial burden on the leverage they made use of, allege that they were misled by banks that sold this product to them in the UAE.
"I was not adequately briefed about the risk factors by the local bank that sold me the notes and the leverage. My bank was too keen to sell me the leverage; they took advantage of my trust in them. I think the central bank and the UAE authorities should act against these banks," said an investor who lost $300,000 (Dh1.1 million) in LehmanLehman notes.
Bankers said yesterday that although they never anticipated a risk of the magnitude of the collapse of Lehman BrothersLehman Brothers at the time of selling these notes, investors were made aware of the implications of leveraged investments at the time of offering such facilities.
"At the time of the offer, the LehmanLehman capital protected notes had a face value of $100. It was clearly understood that any time the value of the notes fell below $80 it could trigger a margin call. Now as it stands the value has fallen by more than 80 per cent and we have made a margin call of 50 per cent of the leverage, which is within our agreement with our customers," said an official with National Bank of Fuj-airahNational Bank of Fuj-airah.
A Citibank source said yesterday that a few of their clients have invested in LehmanLehman and the bank is in discussion with its clients on how best it could resolve the issues related to these investments.
© Gulf News 2008. All rights reserved.
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Stories
Companies
| Company Name | Country | Industry |
| Qatari Diar Real Estate Investment Company | Qatar | Landlords and Developers |
| Emirates Integrated Telecommunications Company | UAE | Telecommunications Services |
| Global Investment House | Kuwait | Investment Banking |
| Bahrain City Center | Bahrain | Properties and Zones |
| Emaar Properties | UAE | Landlords and Developers |
| Dubai Islamic Bank | UAE | Banking |
| Al Rajhi Investment Group | Saudi Arabia | Investment Firms and Funds |
| Abu Dhabi Commercial Bank | UAE | Banking |
| Mubadala Development Company | UAE | Investment Firms and Funds |
| Doha Bank | Qatar | Banking |
Projects
| Project Name | Country | Sector |
| Ras Tanura Integrated Refinery and Petrochemicals Complex | Saudi Arabia | Oil and Gas |
| Fujairah 2 IWPP | UAE | Power and Water |
| QP - Al Shaheen Refinery | Qatar | Oil and Gas |
| KNPC - Al Zour Refinery | Kuwait | Oil and Gas |
| Qatalum Aluminum Smelter | Qatar | Industry |
| WDEPC - Abu Qir Power Plant Expansion - Civil Works | Egypt | Power and Water |
| ADCO - SAS Field Development | UAE | Oil and Gas |
| Qatar Foundation - Sidra Hospital | Qatar | Real Estate |
| Dubai RTA - Dubai Metro - Purple Line | UAE | Infrastructure |
| Saadiyat Island Development - Saadiyat Resort and Beach Residences (Phase 1) | UAE | Real Estate |
I also lost more than US$ 200,000 in a bond issued by Lehman marketed to me through a leading multinational bank which profit are mainly driven from its Asian Operations.
Bank officials dont know a real details about the bond or its status, when things were up none asked they were only keen to push the product and now only keen to take the leverage back.
I thought to file a case against the bank against giving me many misleading information, but i ended up with the settling the issue with the them in a friendly manner despite the huge losses incurred, i thought to drop this comment to advise all readers to think 1000 times before doing any investment and not to get deceived by the artificial image of multinational banks as it all proven null. [Report Abuse | Email to a Friend | Reply to this Comment]
I really dont think the central bank or any of the bankers had the slightest clue as to how risky these things actually were. Lehman itself, the SEC and the FED didnt really know either. It wasnt until around the bankruptcy time that we really discovered how truly mangled this whole thing was.
if someone had told me a year ago they would be selling me shares in AIG, i would've snuffed at the lack luster risk profile and called it too safe. I really dont think the central bank wouldve been able to make the link between the CDOs issued by lehman and the default swaps issued by AIG and peg them as a house of cards all sitting atop a few sub-prime borrowers :-( [Report Abuse | Email to a Friend | Reply to this Comment]
Shouldn’t the central bank approve and have hands -on this type of financial products before it is sold to investors.
I believe the central bank should step up to its responsibilities of protect ting investors and their fund from these sharks that take such risky product and sugar coat them before selling them to Unsophisticated investors and don’t know how to read between the lines. At the end of the day when these investors go to the central bank all they get is that the bank does not protect the naive and that they should have done their homework before getting involved in such products. Tell me what good well that do ? [Report Abuse | Email to a Friend | Reply to this Comment]