JEDDAH, 3 May — The Saudi Arabian Monetary Agency (SAMA) has closed down 10 offices of an agency operating illegally in various parts of the Kingdom on behalf of foreign investment brokers.
These offices have been found dealing in foreign currencies, bonds and shares in Jeddah and the Eastern Province. They were charging a percentage of the investment as commission against every deal, according to a SAMA source.
The illegal offices run by Saudis and expatriates lured deposits and marketed investment portfolios in the Kingdom. They also remitted huge amounts of money outside the country.
Sources at the closed agency said they invested their clients’ money with a New York-based investment company, but according to a SAMA source such transactions are illegal.
A committee set up by SAMA, the Saudi central bank, to investigate the operations of these illegal offices has found sufficient evidence to take penal action against them, the source added.
In Jeddah, the offices were operating in commercial complexes on King Fahd (Sitteen) Street, Madinah Road and Waly Ahd Street.
The concerned departments are also investigating complaints that these illegal offices had collected large sums of money from the public for investing in international share markets. They lured their clients by assuring them of huge returns on investments. The clients were promised a minimum of $2,000 in monthly dividends if they had deposited $50,000 in the US company’s accounts.
The clients said they were deceived by the agents who claimed that they had licenses to offer consultancy and investment services in the international markets.
The SAMA source said transactions of unlicensed companies are not subject to SAMA controls and are not regularly monitored. Therefore dealing with them is likely to result in huge losses to the investors, he added.
SAMA recently took steps to track down foreign companies suspected of illegally providing financial consultancy services to local clients. It had also warned all local banks against dealing with two foreign companies which had tied up with some local firms to provide international banking services in the Kingdom without a license.
