DUBAI // By all accounts, Ian Bruce Simm is a persuasive man. He could generate sizzling excitement in property deals among investors - sometimes promising them returns of up to 40 per cent on their money. He even managed to get them to lend him bail money after he was arrested.
Unfortunately for most of them, the adage about things being too good to be true would turn out to be accurate yet again and he eventually fled the country by putting up his wife's and son's passports as collateral.
He left behind 38 bounced cheques worth Dh65 million (US$18m) and this week, the biggest of those - worth Dh17m - was deemed a criminal matter by a Dubai court.
Not that it will make much difference - he has already been sentenced in absentia to a total of five years in prison by three previous court judgments.
Now instead of being a Dubai success story, the tale of the Australian who arrived in Dubai five years ago at age 49 with little more than big dreams for the property market is a cautionary one being told by those who trusted him.
"Dubai at the time was a hot spot for real estate and he was a very convincing person, which is what you need for this line of work," said one of Simm's former investors.
Simm began selling villas, then quickly moved to the investment side by buying property. At one time he owned 28 flats at Schon Business Park.
In 2006, Simm found a local partner and registered Cougar Holding in Dubai. Under that umbrella, he set up several businesses: Cougar Real Estate, Cougar Communications, Cougar Ventures and Cougar Trading.
Several websites promoted his ventures and his "larger-than-life personality", as another investor described it.
He leased an office for himself and several assistants on the 13th floor of the Fairmont Hotel in Dubai.
He handed out glossy business cards and sponsored high-profile happenings. He even sponsored two competing boats in a race, both of which bore the company logo on their sails.
"The Cougar brand name was getting a lot of publicity - that gave him more credibility," one of the investors said.
He cashed in on that credibility by promising people up to 40 per cent returns. To prove his sincerity, he wrote them cheques dated six months after their initial pay-in.
Simm was able to deliver on that promise, at least occasionally, but as Dubai's property market declined at the end of 2008, his accounts drifted into the red.
"This is when he resorted to the Ponzi scheme," one of his investors said, referring to a pyramid investment scam in which money from new investors is used to pay off early investors.
"He was using new money to pay out old debt. It was the perfect pyramid scheme but it was bound to collapse," said another investor who once considered Simm a friend.
"His overheads by this point were slightly greater than his income," another investor said.
But from the outside, he seemed to be living the Dubai dream.
In late 2006, Simm proposed to an Australian woman with whom he had a child. The couple exchanged vows in Bali, on the shores of the Indian Ocean.
In 2008, Simm travelled several times to Kuala Lumpur, where he was cultivating another start-up business.
The company, called Organisation of Islamic Countries World Trade, promised to unite Islamic trade by connecting Islamic companies worldwide in an online community for a membership fee of Dh1,519.
OIC World Trade, with Simm as its executive director, boasted a prestigious address on the 40th floor of the Petronas Twin Towers in Kuala Lumpur, according to one of his business cards.
"When you hand me a business card with the Twin Towers as your office, I will trust you. Anyone will trust you," an investor said.
The OIC website is still functioning and accepting credit card payments that authorities say are wired to Simm's bank account in the British Virgin Islands.
In mid-2008, Simm made several business trips to Mexico where he met with investors for a separate venture he called "virtual money". The scheme promised users the ability to deposit their money into bank accounts in Mexico and use debit cards to withdraw it worldwide - without paying taxes.
When he returned to Dubai, he tried to persuade his employees to sign up for these virtual bank accounts.
Authorities say he was helped in this project by Robert Everett Hodgins, an American, who is now wanted by the FBI on money laundering charges.
At the end of that year, investors started cashing in their promised 40 per cent profits. The cheques bounced.
On December 24, 2008, Simm was arrested and imprisoned in Dubai because of a bounced cheque he wrote to a Pakistani investor.
"From jail, he managed to convince his friends to loan him some money. He used the term 'invest'. In exchange, he would pay them back 40 per cent profits. These people were borrowing money to loan him. They believed him," one investor said, laughing.
Simm was released on bail days after his arrest.
Before civil court proceedings began, he paid back a portion of the money owed to the Pakistani investor.
As a guarantee he would pay back the full amount, Simm's passport was held by the Pakistani investor's lawyer until the full amount was repaid.
Simm, however, persuaded the investor to give him back his passport, saying he wanted to travel to Malaysia for the launch of OIC World Trade, which he promised would be a source of "millions".
The Pakistani investor agreed to return Simm's passport - but only if he left his wife's instead.
In middle of January 2009, Simm travelled to Malaysia and never returned, leaving behind his wife and one-year-old child. His wife was jobless and had no way to pay for the family's villa in Al Barsha.
"She had a breakdown and was begging the Pakistani investor to return her passport. Out of compassionate grounds, he gave her back her passport five months later," an investor said.
His wife left the country and is now believed to be in Australia, where Simm is also believed to be.
Since mid-2009, more than 22 investors have registered their complaints with the Dubai Police.
An international warrant for his arrest has since been issued and a criminal assistance treaty, yet to be ratified, between Australia and the UAE could see Simm tried in his own country.
A picture of him smiling, posing with a banner of one of his companies, is now displayed on Interpol's wanted list.
@Email:myoussef@thenational.ae
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The Melbourne Mercer Global Pension Index
The Melbourne Mercer Global Pension Index
Mazen Abukhater, principal and actuary at global consultancy Mercer, Middle East, says the company’s Melbourne Mercer Global Pension Index - which benchmarks 34 pension schemes across the globe to assess their adequacy, sustainability and integrity - included Saudi Arabia for the first time this year to offer a glimpse into the region.
The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.
“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.
“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”
Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.
Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.
“To relieve that pressure, governments need to consider whether it is time to switch to a defined contribution scheme so that individuals can supplement their own future with the help of government support,” he said.
Company%20Profile
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
Results
Stage 5:
1. Jonas Vingegaard (DEN) Team Jumbo-Visma 04:19:08
2. Tadej Pogacar (SLO) UAE Team Emirates 00:00:03
3. Adam Yates (GBR) Ineos Grenadiers
4. Sergio Higuita (COL) EF Education-Nippo 00:00:05
5. Joao Almeida (POR) Deceuninck-QuickStep 00:00:06
General Classification:
1. Tadej Pogacar (SLO) UAE Team Emirates 17:09:26
2. Adam Yates (GBR) Ineos Grenadiers 00:00:45
3. Joao Almeida (POR) Deceuninck-QuickStep 00:01:12
4. Chris Harper (AUS) Team Jumbo-Visma 00:01:54
5. Neilson Powless (USA) EF Education-Nippo 00:01:56
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
Padmaavat
Director: Sanjay Leela Bhansali
Starring: Ranveer Singh, Deepika Padukone, Shahid Kapoor, Jim Sarbh
3.5/5
