Employees fear arrest after taking out loans for Sharjah Company

By Anjana Sankar, Senior Reporter (Gulf News)
Published: August 03, 2008, 23:35
Dubai: Employees of a Sharjah-based company have accused their employer of trapping them in a financial scam by acquiring bank loans to the tune of millions in their names by fraudulent means. Aggrieved employees, who now face arrest for dud cheques and failed loan payments, said their company, “City Emperor General Trading LLC”, that has over half a dozen establishments under its umbrella, including the “Al Qathara Supermarket and department stores in Abu Dhabi”, where they were working, opened accounts in their names and made salary transfers to several banks simultaneously to take out huge loans.
Gulf News made several attempts to contact the owner of the company, but he refused to comment.
"We were requested by the company's managing director to take personal loans to salvage the company from a financial crisis, and the company assured us it would be solely responsible for the monthly payments," said Mohammad Iqbal Saidu Mohammad, accounting manager with the firm.
Threatened
He added those employees who did not agree were threatened by the management, and many others were made to sign documents, which were used by the company to open accounts and apply for loans without their knowledge. Mohammad Iqbal claims the company has taken loans in his name up to a total amount of over AED 700000, and now the company is not paying the instalments, he has cases filed against him by banks.
According to him, although his salary was AED 7500, the company gave a false salary certificate of AED 12500 to banks, and transferred the amount for five months in order to make him eligible for loans. Another employee, Rajesh, has loans of AED 73000 from the National Bank of Dubai, AED 78000 from United Arab Bank Dubai and AED 45000 on credit from HSBC Dubai.
"When they asked me to take a loan for the company, I thought it would be just one loan, and that too for a small amount since my salary is only Dh2,000. It was only when I started getting calls from several banks, I realised the company had shown my salary as AED 10000, and cheated me by making me sign some bank documents," said Rajesh. Rajesh also said he was in jail for two weeks and the company did nothing to bail him out.
Substantiating their claims were copies of letters written by the company to banks requesting them time to clear the dues. As shown to Gulf News, the letters read: "As instructed by the employer, some of our employees voluntarily came forward to help this supermarket venture to improve its unfavourable financial position by providing funds which they took as personal loans and through their credit cards from your bank, and we utilised these funds to ease our fund crunch to a great extent."
"In view of the above circumstances, we take full responsibility to settle all the dues of our employees, and are willing to arrive at a mutual settlement with you to clear them in monthly instalments." The employees also said in many cases, salary transfers and cash withdrawals and other transactions were made from their accounts even in the absence of the account holders, some of whom were out of the UAE. According to the employees, three of their colleagues have already been arrested, now the company has reported their names to the labour department as absconders.
"We have reported the matter to the Central Bank, and all other respective banks, and they are investigating the issue. Complaints have also been lodged with the Indian embassy and Amnesty International.
"We live in constant fear of being arrested for no fault of ours. The company is financially capable of clearing the debts and they have the moral responsibility to get us out of this mess," Rajesh said.
Legal expert: Workers 'responsible'
Ignorance of facts is pardonable. But ignorance of the law is never pardonable, said a legal expert implying that the employees are ultimately responsible for financial liabilities in their names. "In my opinion, the criminal liability of dud cheques remain with the employees and no court will entertain any arguments otherwise."
"We can look at the issue in two different ways. From the criminal perspective, the criminal liability lies with the employees because no matter how they landed in the situation, they signed the cheques in good faith and convinced the banks they were capable of repaying the loans."
However, from a civil point of view, if the employees can produce documents acceptable to the court to substantiate that the company had taken responsibility for payment of dues, the banks can hold the employer also liable for the payments.
According to her, the only substantial grounds for winning the case is if the employees can prove by documentary evidence and witnesses that they were misrepresented and the company had forced them into signing documents. "In that case, they can file a case of fraud against the company. But unfortunately they will not win if they do not have strong witnesses and documentary evidence," said the expert.