Friday, June 26, 2009

Behind the Blue Banana story

The local media has given extensive coverage to the story, although surprisingly I haven't seen anything in the British press, yet.

Briefly, Simon Ford the founder of the internet 'events and alternative gifts company' fled the country because his company was on the verge of bankruptcy, owing large amounts of money.

He's not the first to do that of course - but he hit the news because he wrote a letter to 'the Dubai public' trying to explain his actions and promising to pay all debts in due course.

In the letter he says that personal threats were made and that "certain individuals arrived at my place of residence in Dubai at the start of Sunday, confirming that the follow through on many of the threats was very real".

That's not unique to Dubai. In peaceful, law-abiding Singapore I briefly worked for a company which was not paying suppliers and several of them sent heavies to the office to seriously threaten the management.

But the real issue the story raises in my opinion is that the laws on bankruptcy and in particular on bounced cheques needs urgent attention.

As residents will presumably know, writing post dated cheques is, bizarrely in the 21st century, still a normal way to do business in the UAE.

Two things make that dangerous. One, the cheques cannot be cancelled. Two, if they bounce it is a criminal offence.

Even the Dubai Police Chief, Lt. Gen. Dahi Khalfan Tamim, has been calling for it to be de-criminalised and made a civil matter, as it is in most other countries.

We do have bankruptcy laws but business people and lawyers have been calling for them to be updated.

There's another problem which I've mentioned in previous posts. Spending time in jail before charge or trial while investigations are carried out. This happens in all kinds of instances when allegations are made against someone.

Whether someone would be sent to Al Slammer in reality is perhaps less the issue than the widespread perception that it may happen. Not willing to take the risk, people understandably skip the country.

Many of our laws need updating which means a heavy workload for the lawmakers and the advisors who are called in. In fairness, laws are being changed but these areas need particularly urgent attention from three viewpoints. One, it means too many people are in jail when they really shouldn't be. Two, the police and courts are spending too much time on cases which really should't be classed as criminal. Three, the present laws don't gel with Dubai's reliance on business and with its future so dependent on business thriving and growing.

'Arabian Business' has Simon Ford's story here and comments from lawyers here.


Media Junkie said...

that is sad to hear. i had ordered a chocolate massage gift for a friend from there and they really enjoyed. too bad the company went bust - it was an awesome idea. i hope someone can take over it, or start a new one.

Seabee said...

MJ, a chocolate massage?

I hope that means you eat chocolate while being massaged, not wasting the chocolate by rubbing it on the client!

hemlock said...

blue banana is one of my favourite companies... ive booked so so so many fun times from there...


Media Junkie said...

it was both - day to eat chocolate, and a chocolate wrap and massage or something - too bad i can't link it anymore - i heard it was awesome. oneof the cool spa resort-hotel in jumeirah-jebel ali end.

Anonymous said...

I think everyone here would have done the same thing as he did under the circumstances.

How would you be able to do anything when locked up in the slammer????? The stress on your family would be hard to bear.

Respect to the guy for telling everyone why he did it and vowing to pay back all his debts...

Anonymous said...

The man is very wise to take this step .

This is the only way to solve the Cheques problems in Dubai , and all what they are saying about changing the law is non sense and it will never be done because the government and the banks are against it .

If he didn’t do it they will first take him to police station and then confiscate his passport , that if they accept to release him on bail , and then he will be blackmailed by every single authority in Dubai whether court, police, …etc , and even if he stay in jail for the criminal offence which he made , before he finish he will discover that the debtor filed civil case against him and he will get stuck forever , basically Cheques system in Dubai is part of the hidden slavery system .

It is the best way to control people in the UAE , for simple reason is the fact that you can never live without signing post dated cheque , whether the reason is for house rent, business, loan, credit card …etc . at any time if you did not behave as they want it is very simple to cause a temporary problem for you to disturb your income which will make you fall in the trap of bounced Cheques and either you run away and get out or they have legal reason to jail you .

The other issue is the fact that once you sign the cheque you will not be in any position to negotiate no matter whether you are right or wrong , and this is another way to blackmail you and get as much as possible out of you , for example if you give guarantee cheque for a bank as guarantee for credit card and then you default the bank will file criminal case against you for the full amount of the cheque in the police station for free , and he will not accept to give you release or to withdraw the case till you pay full amount ( whether cash or installment ) in additional to all the fines and amounts that might be imposed on you + the police will never interfere and they will never release you if you do not pay ( they will always consider you criminal and not victim) .

In additional to that in the UAE you pay your rent by post dated Cheques which mean if then rent fall you can never cancel your contract or vacate without approval of your land lord so basically once you sign a cheque you have sold your life to the devils , and you should work hard to get back your freedom .

Why they should change this system ?? It’s perfect for them ?also they are known for their slavery system , and this one is legal !!

Anonymous said...

First sad to see Bluebanana close.. I have given/received amazing gift experiences from Bluebanana.. and I must say they had an amazing customer-service

and I loved their last April fools prank on their website...

speaking about the case; while he definitely couldn't sail his business ship to land on solid ground... for many reasons such as recession, wrong decisions and very low sales...

something can happen with all of us...

for me... it is justified for him to flee... because I dont consider him a criminal for being bankrupt...

my dad lost his job and he had so many loans and commitments, cheuqes, rents etc... he was with out a job for 4 months in Dubai... what you want him to do? thankfully I was present and I used all means to help.. my savings.. used my credit cards and top up loans to take him out of all that... because otherwise after 30years in this country he will be thrown in Jail for a bounced cheuqe..

the system need to be addressed ASAP or people will flee from the country making the issue more complicated

Keefieboy said...

I hate the bounced cheque thing. I hated having to give the damn things to my landlord, but I had to if I wanted somewhere to live. The whole system sucks badly, and I know several people who have fallen victim to it. I don't think anyone issues a PDC knowing that it will bounce. But how can you know what your circumstances will be a year or two down the line? You hope to have the money to cover the cheque, but maybe when it comes due you have lost your job or your business' income is falling. What do you do then? Jailing people only makes the problem worse, and so people run away. The sooner this stupid system is abolished, the better. A proper, blame-free bankruptcy law would benefit the UAE enormously.

Anonymous said...

The bounced Cheques law will never be changed .

Today 4 large computer traders had left the country with 9.2Million debt ( Based on article in emirates business 24/7).

The government expect that large number of people will flee the country after the school end & the starting of the dead summer season at the end of June , it seems many traders has tried to survive and waited for any hope that will allow them to re-schedule their debt without going to jail .

It is obvious that the government doesn’t care and their only intention is to collect as much money as possible before people leave , which give them substation time till they manage to attract other victims .

By the first week of July we should defiantly hear many such news about traders who either end up in Jail for bounced Cheques or left the country ,

Such an act is very wise step , to prevent falling victim for the slavery law in the UAE , and later on if it has been improved or changed then it will be safer to come and reschedule or settle any debt based on human and civilized rules and regulation .

So far based on goverment record there was 554,192 bounced cheques in the first 4 month of 2009 , also 2 Billion dhrs the amount left on credit card for people fled the country!!

ZeTallGerman said...

It really is a shame... My friends and have have used BlueBanana numerous times, and we actually had some vouchers we'd received as Xmas presents... null and void now, oh well.
We definitely can't blame Mr Ford for his actions; in his situation with the current laws most people would probably do the same and rightly so!
What is slightly worrying is his statement about receiving "threats", and that these people actually did show-up at his residence on Sunday morning after he had skipped the country already.

i*maginate said...

Word verification is 'quidly' ... how apt! LOL

An article in 7days said risking non-payment is a way of doing business in the region.

Well the tides have turned in suppliers' favour, so it's time to ask for payment upfront. And credit? No way! LOL

Anonymous said...


and share your experience with others

Anonymous said...
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