Dubai is homo to many scams especially Ponzi and trading scams. A recent trading scam is affecting even seasoned businessman that are choosing to work with certain Emirati firms. Just last month, over a dozen businesses were scammed out of nearly DH10 million (US $2.7 million).
A phony Dubai based company called Barnabio General Trading made bulk purchases of various types of goods from tires to rice to smartphones and vegetable oils. Barnabio made these purchases from various companies using high-value post-dated checks called PDCs. After acquiring the goods they were resold at dirt cheap prices around the United Arab Emirates before the company disappeared.
The companies that fell victim to the Barnabio scam only recently realized they were scammed when several checks made by Barnabio bounced. Tom Chao, a sales manager of a mobile and electronic gadget company in Deira sent Barnabia 430 tablets valued at Dh60,000 (US $16,000
0). Chao visited Barnabio’s office where his worst fears were confirmed. The company was no longer at their address with no way of contacting any of their partners.
A Spain-based company named Jebel Ali delivered industrial tools and machines to Barnabio worth Dh443,000 (US $120,000) also saw their first checks due from the company bounce. These companies fell victim to the scam because many of their first dealings with Barnabio dealt in cash. After their trust was earned, Barnabio placed even bigger orders paid by these bad checks before disappearing.
A Chinese businessman that sold Barnabio hundred of smartphones said he spoke with an Indian purchasing manager from the UAE that “was well spoken and even gave me his details including Emirates ID.” He received a copy of a passport, UAE residence visa, and the Emirates ID of Ayaz Syed, who claimed to be a partner of Barnabio. Many of these scammed victims that traveled to the Barnabio offices located in the Lulu Centre building found the office closed since May 1st. It is quite bizarre that a scam trading company like Barnabio had their offices located in the same building as well-known and trusted companies.
Since 2013 at least 15 companies trading companies have disappeared after buying bulk goods worth millions. Global investors need to be aware they are at risk of being scammed out of millions if they choose to do business with companies based out of the United Arab Emirates. In the past the trading companies that turned out to be completely phony included Ronnington, Steelite, Al Shika, Silver Star, and Priyanka to name a few. Investors should avoid Barnabio as well as a new company called Reliancee Group that has also been blamed for using post-dated checks.