The Qatar Financial Centre Regulatory Authority (QFCRA) announced on Tuesday that it has started legal proceedings against First Abu Dhabi Bank (FAB) at the Supreme Court in New York to compel the Bank to pay a court-ordered judgment debt, amounting to QR200mn ($55mn). The action has been filed in New York to recover the amount due to the QFCRA from assets held by FAB in New York, the QFCRA said in a press statement on Tuesday.
FAB has failed to make payment against this final judgment rendered by the Civil and Commercial Court (QFC Court) in the Qatar Financial Centre (QFC), thereby requiring the QFCRA to take steps to enforce the courts judgment under recognised measures for international enforcement of money judgments, the QFCRA said.
It added that the action arises from FAB’s obstruction of an investigation conducted by the QFCRA and the lack of integrity demonstrated by FAB as a firm conducting business in the QFC.
In March 2018, the QFCRA appointed investigators to conduct an investigation into suspected market misconduct by FAB towards Qatari riyal, Qatari Government securities and related financial instruments.
FAB applied for, and was granted authorisation, to operate through a branch in the QFC. As a condition of that authorisation, FAB is required to comply with all QFC rules and regulations, including its obligation to co-operate with investigations by the QFCRA into alleged misconduct.
As part of its investigation, the QFCRA required FAB to provide copies of the relevant trading records and related documents. FAB failed to produce the required information and failed to provide confirmation that it would preserve and not destroy the relevant documents.
As a result of FAB’s failure to provide the relevant records, the QFCRA initiated proceedings in the QFC Court to require FAB to comply with the QFCRA’s request.
Despite FAB’s opposition, the QFC Court ordered FAB to provide the requested documents.
FAB appealed that decision but it was dismissed on 13 May 2019, and the court order requiring FAB to produce the relevant documents became final.
FAB still refused to comply, thereby obstructing the QFCRA’s investigation.
FAB also refused to provide the confirmation to preserve and not destroy the documents it was ordered to produce.
On 17 September 2019, FAB was held in contempt of court.
Following the dismissal of its appeal, FAB stated that it was withdrawing from the QFC and closing its QFC branch.
This unilateral statement of its withdrawal was an attempt to avoid accountability for its actions and to continue its obstruction of the QFCRA’s investigation.
FAB, however, failed to take the legal steps necessary to affect a withdrawal from the QFC and, as such, its status remains unchanged and it remains subject to compliance with the QFCs rules and regulations.
QFC considers financial integrity one of the most important foundation upon which it builds its credibility and customer confidence in the companies authorised to work in it.
As a result of FAB’s obstruction of the QFCRA investigation, the QFCRA imposed a financial penalty of QR200,000,000 on FAB on 21 August 2019.
The financial penalty reflected the gravity and seriousness of the breaches by FAB, which were deliberately aimed at obstructing the QFCRA investigation and harming the QFC.
Following application by the QFCRA and in accordance with the QFCs regulations, the QFC Court ruled that the assessment of QR200,000,000 was to be converted into an ordinary judgment debt payable to, and recoverable by, the QFCRA.
FAB has failed to make the required debt payment despite its legal obligation to do so. Therefore, the QFCRA decided to resort again to the courts to recover its dues.
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