DUBAI // An exchange bureau yesterday blamed a computer glitch for its failure to pay out hundreds of salaries due before the Eid holiday.
Staff at several small to medium-sized companies in Dubai and Sharjah are still waiting for their wages more than two weeks after their employers transferred the cash to the bureau, Asia Exchange.
The bureau's parent company Ali Omran Al Owais said yesterday they were investigating the issue and promised those still waiting to be paid that they would receive their money.
"We have an internal computer system update and there have been some glitches with that process," a spokesman said. "We are working hard to resolve the issue and are in contact with the businesses that have been affected by the problems."
Companies whose staff have not been paid were unconvinced by the explanation. "We aren't taking any chances. The Central Bank in Abu Dhabi has received our complaint," said Manuj Kumar, a manager at Chirag Contracting in Dubai.
"We are scheduled to have a meeting with them next week and they have told us we will get our money back," Mr Kumar said.
His company deposited Dh339,000 with Asia Exchange on August 11 for its 300 workers.
The bureau has told him they would have their money returned by this week, but as yet they have received nothing.
"I don't understand, if it was a computer problem, why it would take so long to get resolved," Mr Kumar said.
Fortuna Engineering in Sharjah deposited its 28 workers' wages with Asia Exchange on August 12. The bureau failed to pay Fortuna's staff so the company decided to pay them in cash, and is now Dh30,800 out of pocket.
"It is rather strange that they are saying it's computer problems because it's been almost impossible to get hold of the offices and none of the representatives are answering their mobile phones," said Lavita D'Souza, marketing manager at the family-run business.
"If they had informed us with an email or a call that this was the problem then that would be understandable.
"It's a real shame this problem has happened because the majority of people affected are blue-collar workers.
"We were lucky in that we could afford to pay the salaries of our workers, but for other companies that have higher wages that will be a problem.
"We will give it a week or so and then look at what legal options we have to recover the money."
The company has registered a complaint with the Central Bank and the police, and have been advised to open a court case to recover the money if they feel they will not otherwise be able to do so.
It is not known if any remittances from UAE residents to their home countries have been affected by Asia Exchange's problems.
The Ali Omran Al Owais spokesman said the company had started updating its computers around Eid Al Fitr.
"At the moment we are still investigating why the problems have occurred but we are hopeful of resolving the matter shortly," he said.
"People will not lose out on their salaries."
Employee salaries can be paid through an exchange bureau as part of the Ministry of Labour's Wage Protection System, which allows the ministry to ensure that companies do not default on salaries and that workers are paid on time without any unlawful deductions.
No one at the Central Bank was available for comment.
nhanif@thenational.ae
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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.”
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