Thursday 31 May 2012

Hasties money disappears from UAE

This relates to the Hasties Group which folded in Australia last week with a loss of 1500 jobs.
Millions shifted from UAE as Hastie collapsed
The ABC has learned that as many as 1,500 Hastie Group workers in the United Arab Emirates may have lost not only their jobs but also their entitlements in the company's collapse late last week.

31 May, 2012

Their termination entitlements are in jeopardy because more than $3 million was transferred from Dubai to Australia in the days before administrators and receivers were brought in.

The company's top three executives, who signed off on the money transfer, then left Dubai on fears they may be detained.

On May 20, as Hastie Group executives tried to negotiate a new deal with their banking partners, Hastie International electronically transferred 11 million dirhams - more than $3 million - from their local bank in Dubai to ANZ Bank in Sydney.

The transfer document shows the move was signed off by Hastie's regional finance manager Nathan Davidson and Gary Allen, the regional human resources manager.

It is understood that the transfer was ordered by Hastie's head office in Sydney because of the fragile nature of the company and rapidly evaporating cash flow.

This has left Hastie's head office in Dubai with little or no money to cover the entitlements of around 1,500 workers, some of whom are expatriate Australians.

There is no suggestion of unlawful activity, however Mr Davidson and Mr Allen left Dubai on Monday, when administrators were officially appointed in Australia.

Another top executive, Robert Kirkham, who has had a long history with Hastie, also departed, because of the very real risk that once word of the Hastie collapse hit, those managers faced the prospect of being detained under strict laws in the United Arab Emirates about the need to cover worker entitlements.

There is a high personal risk for foreigners in the Middle East, especially those whose business affairs turn sour, and this could be the case with Hastie - there is no real consistency of laws in the UAE, for example.

There is no implication that the executives were fleeing, but they probably had cause for concern.

'Delicate situation'

It is understood that more than 20 expatriate Australians have been left stranded.

Some are senior managers who have been working on large projects across the UAE in Dubai and Abu Dhabi.

The remaining workers comprise labourers from India, Pakistan, Kuwait and the Philippines who are entitled by law to gratuities or termination payments.

Clearly, Hastie staff in the Middle East are in the dark, and big questions are being asked about why the $3 million was transferred, where it ended up, who authorised it and whether they will be called to account.

Administrator Ian Carson of PPB Advisory has confirmed the situation in Dubai, but he says it is a "very delicate" situation.

Mr Carson confirmed that the $3 million was transferred at the instruction of Hastie's head office in Sydney and is now tied up as part of a complex investigation.

"They did a sweep under management instructions last week, and I think they were going to transfer some funds back, and then because of the appointment of receivers, the funds were frozen and they are now subject to ... Australian corporations law, which will determine how the priorities work in an insolvency administration," he said.

The administrators say that because the company had so many subsidiaries, money would flow between them regularly.

"Some companies were short of money, some companies had surpluses, so the norm with companies like this is to move the funds around," Mr Carson said.

"I think that management actually had intended and tried to transfer some funds back, but before they could do that the receivers had been appointed and the accounts were frozen, and so there is nothing that then management could do."

Hastie had to be sponsored to operate in the United Arab Emirates, and given that the three Hastie executives who can authorise payments have left the country, the sponsor now has a lot of influence.

The sponsor is closely connected to a royal family of the UAE and sources say that the sponsor is refusing to sign termination letters until there is enough money to pay staff entitlements.

As in Australia, there is the possibility that staff who have been stood down may be taken on by other contractors to complete projects, but that cannot happen until local staff are officially terminated and paid out.

They then have to apply for a new work visa in the UAE.

It is a complex and delicate situation, and there is no guarantee that any workers will receive their full entitlements

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