Simon Ford flees debt in Dubai

[Ernest Torriero]

Debt-laden entertainment mogul flees Dubai
Jun 24, 2009

The flamboyant owner of the online gift and event firm Bluebanana.com has fled the UAE leaving a mountain of debt, a once thriving company in tatters, and a note of apology.

"We have continued to work with financial institutions and suppliers over the course of the last few days to see if the business can continue in some capacity," owner Simon Ford wrote in a letter to his investors obtained by media outlets.

"But this has now become impossible, resulting in the immediate closure of the business," he wrote. “I am sorry, Dubai.”

The demise of Ford's entertainment empire is yet another example of a boom business gone sour in tough economic climes in the Gulf.

Mostly through web sales, Ford's company provided more than 150 high-end entertainment thrill gifts such as rides in fighter jets, skydiving, adventure desert outings and hot air balloon trips.

Ford, 34, could face criminal pursuit as the UAE vows to crackdown on owners and executives continuing to do business while in financial duress.

Ford did not reveal how much the company owes. He has reportedly fled back to Britain after clearing company accounts and leaving a staff of eight in the lurch.

Ford promised to pay back "every last dirham", he wrote. But the website appears shut down and employees are without work.

Ford defended his choice to flee Dubai with his family as a way to avoid criminal prosecution while he attempts to satisfy debtors.

"I am not running away from debt, I am purely protecting those dearest to me and getting out of a country which, due to the lack of structured bankruptcy laws and a banking system which has zero flexibility on loan repayments," he wrote.

“I am not trying to justify that what has happened (or say it) is morally correct, it most certainly is not, but there is a very stark reality in doing business in UAE which unfortunately results in the most horrible decisions having to be made.”

[Sohrat]

Failed Entrepreneurs Flee Dubai, Fear Debtor Prison
Published on 06-29-2009
Source: Telegraph

British entrepreneur flees debts in Dubai

A British entrepreneur has fled the financial crash in Dubai leaving behind hundreds of thousands pounds in debts.

Simon Ford, who founded a "gift experience" company that prospered in the United Arab Emirates' boom years, said he had been forced to escape as he feared being sent to debtors' prison under strict bankruptcy laws.

He is one of thousands of British and other expatriates who have lost work and businesses and are leaving Dubai as it experiences its worst crisis since the UAE's founding 40 years ago.

One bank has predicted the city's 1.4 million population could shrink by almost a fifth. More than 85 per cent of its population is foreign.

Financial planners fear a second wave will get under way this weekend as parents who have lost jobs but waited for the end of the school year follow younger professionals to the airport.

"We know there are people out there who have been hanging on by the finger nails to the end of term," said Clive Pierrepoint, a spokesman for Taaleem, a company which runs international schools including the Dubai British School.

Mr Ford said his decision was made quickly. As his business's debts began to spiral and creditors started to threaten him, he talked to his wife about giving up on Thursday of last week.

He has written an open letter to the city apologising for not paying the money he owes his creditors.

"There is a very stark reality in doing business in the UAE which unfortunately results in the most horrible decisions having to be made," he wrote.

In the early hours of Sunday morning, they were on a plane to Britain with their three children, aged four, two and one.

His company, Blue Banana, prospered in the party atmosphere of Dubai's property and investment bubble. He was listed by a local version of Hello! magazine as one of the UAE's "100 hot entrepreneurs" in 2007.

Blue Banana sold "adventures" such as hot air balloon rides and flights in fighter jets, as well as more routine – for the Gulf – presents such as a day at a health spa.

The firm expanded just as the bubble peaked a year ago, but as demand collapsed was unable to meet loans or pay suppliers and ended up owing £100,000 to £200,000.

Dubai's bankruptcy laws mean that debtors can go to prison merely for bouncing a cheque, while breaching stringent rules on trading while insolvent can bring lengthy terms.

Dubai Airport reported earlier this year that 3,000 people had abandoned cars leased or bought on hire purchase in their hurry to leave.

Nicholas Down, who worked for a real estate company that had failed to pay him for two months, was among them.

"At least I mailed the keys back," he said. Like Mr Ford, he said he had to put his wife and children's interests first rather than trying to continue to fight to survive.

The full extent of "expat flight" may not be clear before September and schools resume.

Some say reports of the downturn have been exaggerated. Even in good times, the bankruptcy laws led to cars being abandoned at the airport – 1,500 in an average year.

Dubai's economy, which has little oil or gas but is a trading conduit for oil-rich neighbours, has always been vulnerable to swings in the world economy.

The government claims it is issuing more work permits than it is cancelling.

Mr Pierrepoint said he was optimistic he would know if there were a truly devastating exodus on the way.

"At Dubai British School we still have 200 people on our waiting list," he said.

But removals companies are reporting increases of 20 per cent in bookings on previous summers, while internet sites and shop windows are full of advertisements for garage sales and second-hand furniture.

Standard Chartered, the investment bank, has warned there would be a "major population outflow in the coming months".

Mr Ford told The Telegraph he had been contacted by other businessmen who had suffered a similar fate and ended up in jail.

He said he was in contact with his creditors and intended to repay them once he was back on his feet.

"I am eternally sorry and am committed to taking personal responsibility to paying back everything that is owed, no matter how long this may take," his letter said.