Shocks on the banking sector in the UAE are occurring one after the other, after the scandal of the collapse of the company "NMC" for health care, he revealed new information that "Phoenix Commodities PVT", which specializes in agricultural products, has offices in Dubai And Singapore; It is subject to liquidation, and it has facilities from Emirati banks and other banks with more than one billion dollars.
Experts believe that such crises will increase the pressure on UAE banks in light of the tight liquidity caused by the closures in economic activities against the backdrop of the spread of the Corona virus.
A document prepared by liquidators - seen by Reuters a few days ago - stated that "Phoenix" accumulated potential losses of more than four hundred million dollars.
The document discloses that prior to the appointment of the liquidators, the group had available $ 1.6 billion in bank facilities with a number of banks based in Singapore, Britain and Dubai.
According to two sources told Reuters, Gaurav Dhawan, the company’s main shareholder - who is also the CEO of the trade group - left Dubai recently for London.
The document adds that the company faced concrete commitments in excess of four hundred million dollars as a result of the accumulation of losses incurred by the financial derivatives trading division at "Phoenix Global DMCC".
Phoenix "Global DMCC" is the arm of the Dubai-based company, which trades commodities through the DMCC.
The Phoenix Group operates worldwide with about 100 companies in Europe, Africa, Asia and North America, and employs over 2,500 employees.
The company was founded twenty years ago, has revenues of three billion dollars in 2019, and trades in grains, coal, minerals and other products, but it collapsed when the Corona virus disturbed financial markets.
The UAE banking sector has lived and is still a real confusion due to the exposure of several local banks to the troubled Emirati Hospital Management Company, "NMC Health" and its subsidiaries.
This concern is due to the fact that these banks give huge loans to the company that is close to declaring bankruptcy.
The total proceeds of loans granted by these banks collectively to the troubled company amount to about three billion dollars, of which the UAE banks share more than two billion.
According to a previous report to Reuters, the company "NMC" - which was founded by Indian businessman PR Shetty in Abu Dhabi in 1985 - recently revised its debt figures to $ 6.6 billion, which is a number much higher than previous estimates.
Financial analyst Nidal Khouly says that banks in the UAE will face problems because of their exposure to the debts of health companies Phoenix Commodities BVT and NMC.
He adds to Al Jazeera Net that the banks are in deep trouble when the customer is classified as "unquestionable," and suddenly he turns into a customer in liquidation, as is the case for the two companies.
In this case, Al-Khuli continues, the profits of the banks are diminished, and its capital faces a number of risks related to the customer's inability to pay.
Al-Khouli notes that Emirati banks may be relatively able to withstand these two crises, but if other crises fire in the future, you will inevitably need support from the central bank to maintain their financial solvency, especially in light of tight liquidity due to the interruption of economic activities with the spread of the Corona virus.