Indian traders left reeling by AED15-million FMCG logistics scam in Dubai

Indian traders left reeling by AED15-million FMCG logistics scam in Dubai
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Published: 24 July 2019 - 10:31 a.m.
By: Logistics Middle East Staff

Several dozen rice traders in India have been left on the brink of bankruptcy following a massive logistics scam that saw more than 6,000 tonnes of rice shipped to Dubai and then sold on the black market, reports Gulf News.

The rice, worth more than AED15-million, was sold to Dubai’s Al Rawnaq Al Thahbhi General Trading by dozens of Indian exporters, who had first been ‘groomed’ for the fraud through the placement of smaller cash orders, which were duly paid as normal.

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After Dubai’s Al Rawnaq Al Thahbhi General Trading had won their trust, it placed much larger orders for 6,000 tons from 20 odd exporters in India between March and April this year.

Traders were sent a Telegraphic Transfer (TT) receipt for each shipment as ‘proof’ that their payments were being electronically remitted to their banks in India, but those payments were subsequently cancelled and the security cheques bounced.

In total, 23 of these TTs were cancelled, totally US $4.18-million.

Many of the traders came to Dubai to investigate, but found that Al Rawnaq’s rented warehouse in Al Quoz where the rice containers were delivered was empty as was the company’s office at XL Tower in Business Bay.

Al Rawnaq’s Indian owner, Robin Gupta left the UAE after handing the reins to a man identified as Shaikh Tariq Awais from Pakistan, who has also since fled, after conning even the real estate company behind the warehouse out of their money.

“He took a large warehouse in Al Quoz against a post-dated cheque which has now bounced,” said the real estate agent who dealt with Tariq, speaking to Gulf News.

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According to one trader who spoke to Gulf News, the exporters had done their due diligence.

“We visited Al Rawnaq Al Thahbhi’s office, checked its trade license, met its general manager and, more importantly, released the shipments only after we had received telex transfer (TT) receipts from a money exchange in Dubai confirming the acceptance of the remittance request and the initiation of the transaction,” says Vinod Goel of Karnal’s NM Food Impex company.

He shipped 22 containers of Basmati rice worth $321,170.

Among other rice exporters similarly duped are KG Industries ($1.02 million); Harman Rice ($553,640); Amritsar Riceland ($451,250) Aarna Foodstfuff ($289,925), AS Impex ($287,985) and Heera Rice Mills ($131,435).

Spice and coconut wholesalers have also been hit. Karnataka’s Joseph International lost $109,200, Manna Organic $125835 and Tamil Nadu’s SJN Coir Export, $210,000.

Some traders are now facing insolvency after building up their companies over the course of a lifetime.

“I am ruined and will have to sell my house and factory. I built this business over 20 years. An oversight destroyed it overnight,” said a trader who did not wish to be named.

According to Gulf News, the Indian consulate in Dubai is in touch with UAE officials, who are investigating the matter, but with the people responsible now at large overseas, and the rice having been sold off, recovering the traders’ money and goods is near to impossible.

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