(MENAFN- The Arabian Post) Arabian Post -
A Dubai court has ordered the former CEO of Drake & Scull International, Khaldoun Al Tabari, alongside a former employee, to pay a staggering $41.3 million in damages. The court ruling follows the company's involvement in financial mismanagement that led to significant losses. Al Tabari and the ex-employee, identified as an unnamed former senior manager, were found guilty of embezzlement and fraudulent practices during their tenure at the firm.
Drake & Scull, once a leader in the regional construction industry, has faced an uphill battle since its decline began in 2015. The company's downturn, which led to bankruptcy in 2017, was attributed to a mix of mismanagement, massive debts, and a series of problematic projects across the Middle East. This court ruling comes as part of ongoing efforts by authorities to hold those responsible accountable for the firm's financial collapse.
The ruling follows a series of investigations, which uncovered that Al Tabari and the ex-employee had been involved in diverting company funds for personal use, forging financial documents, and inflating project costs. While the company's board had tried to distance itself from the individuals involved, the court's decision makes clear the extent of their legal liability. Both individuals had denied the charges but were unsuccessful in defending their actions before the court.
Al Tabari's leadership came under scrutiny after Drake & Scull was hit by several financial scandals. Under his direction, the company expanded rapidly, taking on high-profile projects across the region, particularly in the UAE and Saudi Arabia. However, many of these ventures faced significant cost overruns, delays, and claims of mismanagement. The court ruling is a significant step in the broader efforts to unravel the financial and managerial issues that plagued the company.
The ruling comes as a blow to the construction giant, which had previously tried to turn its fortunes around by restructuring its debts and seeking new investors. The company has been involved in multiple lawsuits from creditors seeking repayment of outstanding debts, which at one point amounted to billions of dirhams. Despite its bankruptcy filing, there have been ongoing legal efforts to trace the flow of misused funds, with authorities pursuing any individuals connected to the company's downfall.
Legal experts say that the court's decision to impose such a significant penalty underscores the seriousness with which financial misconduct is treated in the UAE. The UAE's legal system has become more stringent in recent years, particularly in cases involving large-scale financial fraud. The ruling serves as a warning to other corporate executives about the consequences of mishandling company funds, especially in an industry as scrutinized as construction.
The case has drawn considerable attention from investors and businesses across the region. Drake & Scull's financial mismanagement has become a cautionary tale in the Middle East's construction sector, once a symbol of rapid growth and immense profits. However, many companies in the industry are now taking a closer look at governance practices and tightening their internal controls to prevent similar outcomes.
This ruling also highlights the ongoing challenges that companies in the UAE face when it comes to corporate governance and legal accountability. While the country has made strides in improving business regulations and attracting foreign investment, concerns about corruption and corporate mismanagement still linger. The case against Al Tabari and the former employee has revived calls for stricter oversight in the corporate sector, with some experts suggesting that additional reforms are necessary to prevent such issues from recurring.
Despite the financial setbacks, Drake & Scull continues to deal with the legal fallout from its bankruptcy. Creditors have been attempting to recover losses, while former employees and partners are still embroiled in legal disputes over unpaid debts. The company's once-promising future in the regional construction market has been overshadowed by its financial collapse, leaving many questioning whether it can ever recover its former stature.
Al Tabari, who had been a central figure in the company's expansion, remains a controversial figure in the business community. While he had been lauded for his leadership during the company's peak, his reputation has been tarnished by the allegations of financial misconduct and the court's subsequent judgment. The ruling serves as a stark reminder that no one is immune from the legal consequences of corporate mismanagement.
In addition to the financial penalties imposed by the court, both Al Tabari and the former employee may face further legal challenges. Investigations into other alleged financial irregularities at Drake & Scull are ongoing, with authorities examining more documents and potentially expanding the scope of the case. Should further evidence of fraudulent activity surface, it could lead to additional charges and penalties.
via Drake & Scull Ex-CEO and Employee Face $41.3 Million Court Order
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