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Abu Dhabi Company and Director Fined Dh118,500 for Faking and Concealing Documents

Abu Dhabi Company and Director Fined Dh118,500 for Faking and Concealing Documents

Abu Dhabi Company and Director Fined Dh118,500 for Faking and Concealing Documents. In a recent development that underscores the UAE strict adherence to regulatory compliance, a company registered in the Abu Dhabi Global Market (ADGM) and its director have been fined a cumulative amount of Dh118,500 for violations, including falsifying and concealing documents. This incident highlights the UAE’s commitment to maintaining transparency and accountability within its business environment.

Details of the Penalties

The company, Avante Limited (Avante), and its director, Khaldoon Bushnaq, faced penalties issued by the ADGM Registration Authority (RA). The fines include:

Entity Fine Amount Remarks
Avante Limited Dh58,700 For providing false and misleading information
Khaldoon Bushnaq Dh59,800 For concealing documents and negligence

In addition to these fines, Avante was also ordered to pay Dh36,700 to cover the RA’s investigative costs, bringing the total financial liability to Dh118,500.

Background of the Investigation

The ADGM Registration Authority initiated an investigation after uncovering that Avante had submitted a document containing a falsified stamp and an authentication code to a UAE-based bank. This forged document appeared to have been issued by the RA.

Further scrutiny revealed that:

  • Avante Limited: Provided false and misleading information to the authorities.
  • Khaldoon Bushnaq: Concealed key documents and failed to implement adequate safeguards to prevent the falsification of company records.

The violations obstructed the RA’s ability to conduct a smooth investigation and led to increased investigative costs.

ADGM’s Statement on the Violations

In an official statement, the ADGM expressed its stance on the gravity of the offenses.

“These are serious contraventions of ADGM’s commercial legislation. The RA will take action against licensed persons who provide us with false and misleading information or conceal documents,” the statement read.

The ADGM emphasized the need for cooperation and transparency, stating that it has “little tolerance for those who obstruct or hinder our investigations.” The conduct of Avante and its director not only violated ADGM’s regulations but also adversely impacted the investigation, resulting in unnecessary additional costs.

Settlement and Fine Reduction

Avante and Bushnaq agreed to settle the case against them, which led to a 20% reduction in their fines as part of the settlement agreement. Despite the discount, the penalties underline the seriousness of the violations and serve as a reminder to all entities operating within the ADGM to adhere strictly to compliance standards.

Initial Fine (Before Settlement) Settlement Discount (20%) Final Fine Amount
Dh148,125 Dh29,625 Dh118,500

About Abu Dhabi Global Market (ADGM)

The ADGM is a prominent international financial free zone situated in Abu Dhabi, governing the entirety of Al Maryah Island and Al Reem Island. Established to promote Abu Dhabi as a global financial hub, the ADGM adheres to international best practices in corporate governance and regulatory frameworks.

Key Features of ADGM:

  • Transparent Regulations: Ensures fair and ethical business practices.
  • International Standards: Aligns with global financial regulatory frameworks.
  • Strategic Location: Covers Al Maryah and Al Reem Islands, fostering economic growth.

Lessons for Businesses Operating in the UAE

The incident serves as a cautionary tale for companies operating within the UAE, particularly in free zones like the ADGM. The UAE has always been a hub for global business and investment, but this reputation is built on a foundation of trust, transparency, and compliance.

  1. Adherence to Regulations: Companies must ensure their practices align with UAE laws and regulations.
  2. Transparency: Providing accurate information to authorities is paramount.
  3. Internal Controls: Robust systems should be in place to prevent document falsification or other irregularities.
  4. Cooperation with Authorities: Businesses must engage with regulatory bodies in a cooperative and transparent manner.

Why Compliance is Crucial in the UAE

The UAE’s business ecosystem is built on principles of integrity and trust. Regulatory compliance ensures that businesses contribute to the nation’s economic growth while maintaining global standards. Non-compliance not only attracts heavy fines but also damages the reputation of companies and individuals involved.

Conclusion

The fines imposed on Avante Limited and its director reflect the ADGM’s commitment to upholding the highest standards of corporate governance. This case should remind businesses operating in the UAE of the importance of compliance, transparency, and accountability.

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