Mashreqbank has recovered nearly two million United Arab Emirates Dirhams (Dh 2 million - US$544,586) from Madhav Patel, allegedly the principle perpetrator of the Solo Industries frauds that remain one of the largest and most infamous letters of credit (L/Cs) scams in recent years.

This is second tranche of cash lost in the frauds recovered so far by Mashreqbank, which has now recouped about Dh12 million (US$3.3 million) or 25 per cent of the money it says it is owed by the Patel family who owned Solo Industries.

Exposure

Mashreqbank, the United Arab Emirates' (UAE's) largest private bank measured by assets, emerged from the Patels' Solo Industries frauds with a total exposure of Dh47 million (US$12.8 million).

Last June Mashreqbank succeeded in recovering a first tranche of Dh10 million (US$2.7 million) from the Patels. This makes Mashreqbank the only bank based in the UAE - from where Patel allegedly conducted the frauds in the late 1990s - to have recouped some of its Solo Industries losses.

Relentless pursuit

A statement from Mashreqbank says that through relentless UK court proceedings the bank has been able to obtain decrees for the sale of properties and other assets. "In some cases, company ownerships have been taken over and their assets sold through specially created Special Purpose Vehicles," the statement says.

Chief Executive Officer of Mashreqbank, Abdul Aziz al-Ghurair, has said the bank will be relentless in its legal pursuit. "Our investigations and court actions against Patel and his cronies will be pursued to the bitter end to send a clear message that fraudulent operators cannot escape their liabilities in the UAE simply by fleeing the country," he says.

Whereabouts unknown

The frauds, which extensively used bogus L/Cs and fake bills of lading, were exposed in 1999 when Patel slipped out of the UAE to London. He has since disappeared elsewhere.

Mashreqbank is one of 21 banks conned out of an estimated total of US$250 million in the Solo Industries L/C scam. Other banks reportedly caught up in the frauds include Citibank, ABN Amro and Barclays (DCWorld, 17 June 2002).

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