A week ago, news broke that Simon Ford, owner of an events and alternative gifts company, BlueBanana.com, had fled the United Arab Emirates following the insolvency of his company, based out of Dubai, the UAE’s crown jewel city.
BlueBanana sells skydiving and jet fighter flights among some of the more unique gifts that could be purchased on the site.
Ford sent a passionate letter to former suppliers and customers, explaining that the United Arab Emirates' “lack of structured bankruptcy laws and a banking system which has zero flexibility on loan repayments” had forced him into fleeing the country to avoid his debt.
Ford apologized for leaving the country following the “exponential” growth of BlueBanana’s debt, but promised to repay in full.
He also said that threats were being made against his person and his family, prompting his decision to leave the country.
Legal experts in the United Arab Emirates are now calling for an overhaul of the country’s banking system and encouraging a review of whether bouncing a check in the UAE should be a criminal offense.
“There have been discussions amongst lawyers and accountants as to the need for modernization of the UAE insolvency regime,” says Raza Mithani, a senior advocate at the law firm Al Tamimi.
“The areas which are probably in most urgent need of review are the enactment of detailed provisions dealing with individual and cross-border insolvency, together with improved legislation to better facilitate the rescue of businesses in financial distress.”
Mithani also believes a review of the country’s current policy to treat bounced checks as a criminal offense is overdue.
Ford would likely agree.
“I am not trying to justify [fleeing the country], but there is a very stark reality in doing business in UAE which unfortunately results in horrible decisions having to be made.”
“On a personal level, I have been through the most soul destroying and emotionally horrific four days of my life, and am likely to continue to do so for some time as my integrity is repeatedly called into question and rumors of me stealing people’s money, amongst other accusations, grow out of control.”
Under the current system in the United Arab Emirates, there are no bankruptcy laws for “non-traders,” a category that includes consumer bankruptcy cases such as employees of companies.
Mithani also believes there is “a need to encourage awareness of legislation that already exists.
This would enable businesses in difficulty to consider their options at the earliest possible opportunity.”
In Ford’s case, the entrepreneur has said that he has already set up an email account for people to contact him regarding outstanding payments, also promising to “proactively contact” all those owed money by the company within two days of his letter.
He concluded by apologizing to Dubai itself. BlueBanana’s website has been shut down, and no one at the firm is currently answering phone calls, according to Soren Billing of Arabian Business.
Source: Arabian Business