Four Dubai-based computer dealers are alleged to have fled this month leaving behind debts totalling Dh9.2 million in the market.
According to the Dubai Computer Trading Group (DCTG), Al Hudaway Technologies, Al Kuwami General Trading, Jebel Hatta and Syntax Computers allegedly owe the computer trading community Dh2.2m, Dh2.8m, Dh3m and Dh1.2m, respectively. Al Kuwami also conducted business in the construction and food sectors. All the absconding dealers operated out of Dubai's Khalid bin Al Walid Street, popularly known as Computer Street, which has a high concentration of IT hardware dealers. There was a similar incident in March when the owner of Fabis Trading, another dealer on Computer Street, fled with unpaid debts of Dh3.2m to traders and Dh2m to banks.
With the help of the DCTG, a non-profit organisation for IT traders, Fabis Trading was able to come back to business.
Rakesh Bohra, Communications Secretary of DCTG and the owner of Wifi Computers on Computer Street, said: "We were able to trace the owner and help him to pay back the debts. Since March he has paid off 25 per cent of the money owed to traders – Dh800,000 – and the rest would be repaid in 14 to 16 months. He was able to generate cash by selling his property and clear his existing stock."
DCTG presently has 100 registered members, mainly from Computer Street. The organisation is set to have 200 members by September.
According to Bohra, the main reason for such malpractices is that there is a lot of undercutting in the market, reducing trader margins to two to three per cent, which should ideally be at 10-15 per cent. "These companies have gone bust mainly because the market trusted them based on their general trade licences dating to 1998. But nobody checked their computer trading business, which was only six to 12 months old. Distributors also are to blame, as they spread their partner networks so thin that traders are eating into each other's margins," he said.
A lot of the computer traders or resellers have old trade licences for activities in other business sectors that they were engaged in before coming into the computer trade.
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