Monday, August 10, 2009

Its a Raid! Omani cops move in on shady financial dealers

Oman Health Authorities are 'discussing' the H1N1 situation with the Indian School Muscat as it seems there is a major outbreak of swine flu amongst students there. Expect a temporary shut down.

Breaking news:In a timely move, Omani regulators and ROP raided the Muscat Offices of ShareKhan, a Mumbai based stock broking firm that ran a share broking outfit focused on NRIs (non-resident Indian), and have detained 2 of the staff.

This is probably related to the recent complaints of illegal investment schemes in the Sultanate (one of which recently turned out to be a classic Ponzi scheme). The recession and collapse of the stockmarkets have caught out a lot of dubious practices, and people who believed promises (promises they never should have trusted in the first place!) are now complaining.

Its always amazing how the usual pyramid schemes regularly do the circuits of the NRIs here too.

Anyhow, see the story in the India Times

Oman police raid Sharekhan’s Muscat office

10 Aug 2009, 0102 hrs IST, Shailesh Menon, ET Bureau

MUMBAI: Muscat Securities Market Regulator, along with Oman police, conducted a raid on Sharekhan premises and arrested two officials allegedly for
selling investment products without proper licence. While confirming the raid and subsequent arrest, Sharekhan officials maintain that they have not been chargesheeted by Oman police as yet.

“We have not been told why they have detained two of our officials. We operate in Oman — as per their laws — with proper licences; the authorities there are not telling us what more regulatory approvals we require to operate there,” said a Sharekhan spokesperson.

According to brokerage officials, the Muscat office only executes broking orders on behalf of clients (non-resident Indians only). The firm has not received licence to sell or distribute investment products in that country.

“From what we hear, the Muscat unit of Sharekhan was under police surveillance for over two weeks. The police could be acting on some investor complaint or directions from the ministry,” said the high-ranking official of an Indian brokerage firm, which has operations in the Gulf.


According to sources that have experience doing business in West Asian countries, law enforcement agencies and the judiciary are particularly harsh against Asian individuals or business groups violating financial laws in Gulf countries. The governments of leading Emirates like Dubai, Qatar and Oman have begun crackdown on financial services companies that are functioning without proper licences. The risk aversion among regulators is so high that ESCA banned financial services firms and banks from selling structured investment products to its citizens.

“Much of it is because if investors have any complaint, they approach local police or courts with reparation charges. If government officials (in Dubai) are to be believed, complaints involving financial frauds and product misselling have become rampant in the Gulf,” said a broker. Reliance Money, Kotak Mahindra, Geojit Financial Services, Religare Securities, JRG Securities and Karvy, amongst several others, have operations in the Gulf.

Much more than ensuring presence, brokerages are keen on taking aboard Indians, also persons of Indian origin (PIOs), wanting to invest in domestic markets. Such a link-up with the diaspora not only helps broking firms diversify their revenue streams and strengthen distribution network, but also beefs them up with a large chunk of long-term investible funds.


  1. haha!

    Oh dear, more people getting caught in these scams. I do have to wonder how foolish people have to be to buy-in to these classic ponzi schemes.

  2. Back home ! its absolute madness .. ponzi's rit n left. Phew !!! now is muscat too .

  3. Heh, I doubt Sharekhan's involved in a Ponzi scheme. It seems too crass, even for them.

    Any idea what these unauthorised investment products are?

    This raid probably has a lot of Indian financial groups in the Gulf running to check the fine print on their legal docs - they don't want to be next.

  4. Indians and financial irregularities!!!! I don't believe it!


  5. You only have to skim the surface of the motor industry to realise that a good many indians are crooks. The motor business is Indian Mafia run through and through; as is a lot of the Finance and Insurance sectors.

  6. Sharekhan is an established stock trading company at Mumbai. They have their own internet based platform for trading in Indian stock exchange just like KOTAK SECURITIES, HDFC etc. They were probably also selling pension and insurance products to NRI and not any ponzy schemes like Madoff. This may be some sort of rivalry from competitors in the same business here. Kotak is represented through OAB and Geogith is also present here.

  7. Where from you got this photo? Was it required for ROP to break open the doors or you have just given the picture for more impact?

  8. Wonder what James has against Indians. Care to mention your nationality James


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