Wednesday, Jun 07, 2017

Dubai: A small money exchange firm shut down by authorities following irregularities has started paying off to customers, mainly small businesses who had Wages Protection System (WPS) accounts.

The exchange is also refunding remittances the exchange did not send before it was shut down.

Last week, the UAE Central Bank ordered the closure of all six branches of Smart Exchange after detecting irregularities.

Customers had earlier complained to the authorities about their remittances not reaching the destinations and wages processed by the exchange had reportedly gone unpaid. But now, as directed by the Central Bank, Smart Exchange’s main branch opposite BurJuman Centre in Bur Dubai opens daily from 3pm to 6pm, Sunday to Thursday, to pay unpaid wages only.

Gulf News visited the branch on Sunday but most staff members declined to speak to the media.

Iron bars had been drawn across the branch’s front, pulled back just enough to get through the door.

One staff member, however, told Gulf News that the branch would remain open for the next six to ten days. Around 100 customers, roughly 40 per cent of the people who held WPS accounts, are yet to come to pick up their wages, he added.

The staff was not sure on the future of the chain, or the security of their jobs.

He said that Central Bank officials were making daily visits to ensure that customers were able to pick up their wages. The money was being paid from the firm’s Dh3 million in bank guarantee that exchange houses are required to have.

Barred from business

During this time, the exchange house cannot conduct any other form of business, the staff member said.

The chain, which was established in 1989, had three branches in Dubai, one in Sharjah, and two in Abu Dhabi. It was one of 65 exchange firms in the UAE, handling remittances overseas, exchanging currencies and distributing wages.

The exchange house was owned by an Emirati and an Asian general manager. But the Asian man reportedly had absconded with the money collected from customers, according to reports.

Phone calls to the Asian general manager, S.A., went unanswered.

Sources told Gulf News that Smart Exchange did not have sufficient money as bank guarantee to compensate the customers who lost their money.

The company did not comply with the new Central Bank regulations, which stipulate that exchange houses must increase their bank guarantee from Dh3 million to Dh50 million.

Apart from individual customers, a Dubai-based company that depended on the exchange to distribute its employees’ salaries also lost their money.

Sources in the Central Bank told Gulf News that the total loss is estimated to be six times the bank guarantee of the exchange.

“The UAE Central Bank has started to take all measures to avoid any malpractices in the market,” the source said, speaking on condition of anonymity.

One of the victims, manager of a Karama cafeteria, said he had been able to withdraw most of his staff’s wages from the BurJuman branch. The salaries withdrawn ranged from Dh2,000 to Dh4,000. “Yesterday, at 3pm, the money cleared,” said the manager, who gave his name as Shamir. “But it didn’t all clear yet.”

by Paul Crompton Staff Reporter

Gulf News 2017. All rights reserved.