Doha: Qatar Financial Centre Regulatory Authority (QFCRA) announced on Tuesday that it has started legal proceedings against the 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 QR 200 million ($55 million).

The action has been filed in New York to recover the amount due to the QFCRA from assets held by FAB in New York, QFCRA said in a press statement 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 recognized measures for international enforcement of money judgments, QFCRA said.

It added that the action arises from FABs obstruction of an investigation conducted by the QFCRA and the lack of integrity demonstrated by FAB in its conduct as a firm conducting business in the QFC.

In March 2018, QFCRA formally appointed investigators to conduct an investigation into suspected market misconduct by FAB towards the Qatari Riyal, Qatari Government securities and related financial instruments.

FAB applied for, and was granted authorization, to operate through a branch in the QFC and, as a condition of that authorization, FAB is required to comply with all QFC rules and regulations, including its obligation to cooperate 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 FABs failure to provide the relevant records, the QFCRA initiated proceedings in the QFC Court to require FAB to comply with the QFCRAs request. Despite FABs opposition, the QFC Court ordered FAB to provide the requested documents.

FAB appealed that decision but the appeal 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 QFCRAs 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 QFCRAs 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 authorized to work in it. It is within this context that the ability to investigate alleged wrongdoing by authorized firms in the QFC is essential. FABs deliberate obstruction and refusal to comply with its legal and regulatory requirements presented a significant threat to the QFC, as a financial center.

As a result of FABs obstruction of the QFCRAs investigation, the QFCRA imposed a financial penalty of QR 200,000,000 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 QFCRAs 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 QR 200,000,000 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. The QFCRAs action demonstrates that it will not hesitate to take all measures necessary to protect the integrity and reputation of the QFC as a leading financial and business center and to remedy all harms to the QFC.

SOURCE: THEPENINSULAQATAR