FMT upholds DFSA action against Al Masah
The specialist independent tribunal affirmed charges against two firms and three individuals and imposed financial penalties
The Financial Markets Tribunal (FMT) has affirmed a decision by the Dubai Financial Services Authority (DFSA) against Al Masah Capital and the top executives, but mentioned that its CEO is an honest individual.
The specialist independent tribunal reconfirmed the charges against Al Masah Capital Limited, a Cayman Islands registered company now in liquidation, and Al Masah Capital Management Limited, a DFSA Authorised firm, also now in liquidation. It also affirmed charges against three individuals and imposed financial penalties:
• $3,000,000 on Al Masah Capital;
• $1,500,000 on Al Masah Capital Management Limited;
• $225,000 on Mr Dash;
• $175,000 on Mr Singhdeo; and
• $150,000 on Mr Lim.
The FMT sanctions are the same as those imposed by the DFSA, except for the fine for Mr Singhdeo, which the FMT increased by $25,000. This was because the FMT saw Mr Singhdeo’s responsibility for the misconduct as somewhat greater than that reflected in the fine imposed by the DFSA.
The FMT also upheld the DFSA’s decision to prohibit all three individuals and concluded they are not fit and proper to perform any function in connection with financial services in or from the DIFC. The FMT also ordered them to pay the DFSA’s costs of the proceedings.
Bryan Stirewalt, chief executive of the DFSA, said firms and the individuals in charge have a responsibility to ensure that all financial services activities in or from the DIFC are appropriately authorised and carried out properly.
“The DFSA is particularly concerned by attempts to use legal structures to avoid regulation when the substance of the activity is a financial service conducted in or from the DIFC. This matter also shows the extent to which the DFSA will take action to ensure investors are treated fairly and are not misled by misrepresentation, concealment or omission,” he said.
“Protection of direct and indirect users of DIFC financial services is a key priority of the DFSA. The DFSA will also take appropriate action against individuals involved in the running of companies that breach the DFSA’s rule,” he added.
In its judgment, the tribunal remarked that Mr Dash came over as “an extremely intelligent and forceful individual… and is no doubt essentially a truthful person”.
"Mr Dash is fluent in English although it is not his first language and he came over as an extremely intelligent and forceful individual. He had a formidable mastery of the arguments in this case as his evidence showed. While Mr Dash is no doubt essentially a truthful person it seemed at times from his answers that he was advocating the position adopted by the Applicants towards an issue rather than giving an accurate recollection of events. This may perhaps be partly the results of this dispute and the competing arguments having been current now since late 2015 and of a necessary degree of informality in the audio-visual process," according to the judgement.
This case is essentially about placement fees and the extent to which they should have been and were disclosed to investors. It takes place against a complex legal background. The undisclosed placement fees initially estimated of $29 million seems to have come down to around $10 million, it seems after taking various fees which were paid to brokers and fees paid by Al Masah’s own shareholders to its own company. It took over a period of six years.
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