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Dubai Debtors Go on Hunger Strike

Camilla Hall and Simeon Kerr

About 20 jailed foreign businessmen have gone on hunger strike in Dubai to protest against lengthy sentences for writing checks that bounced, a criminal offence in the United Arab Emirates.

Dubai Palm Island
Photo Source: AP

“I’ve exhausted every avenue that I can see,” Peter Margetts, 48, a former property developer, told the Financial Times from a prison pay phone. “I’ve exhausted the legal system, the lawyers have their hands tied here and they’re not going to rock the boat.”

Mr. Margetts is one of three British prisoners who started a hunger strike on Sunday. Other jailed businessmen come from Ireland, Saudi Arabia, Bahrain, Lebanon, India and Pakistan.

Many of the hunger strikers fell victim to Dubai’s once-thriving real estate market, struggling to meet their payments when boom turned to bust in 2008. Twelve face sentences of more than 20 years because each bounced check can translate into a jail term of up to three years.

Mr. Margetts has served three years of a more than 20-year sentence for 49 bounced checks. The checks bounced after a fraudulent developer stole money from him, he said. “Obviously it’s at the beginning [of the hunger strike] but I’m a strong sort of character—I got myself out of a really difficult life, I’ve always been a fighter I’m not going to give up,” he said.

Christopher Renehan, a 38-year-old Irishman and a partner in a contracting company, started the hunger strike last week. Late payments from clients meant checks he had written on behalf of his company bounced.

The strike has served to highlight the archaic foundations of Dubai’s financial system, where failing to honor a check remains a crime. Post-dated checks are used for security on anything from car leases to rentals to multimillion-dollar property deals.

“Before the crisis, the check issue wasn’t highlighted to foreigners. It’s only since the crisis that this has really come to light publicly,” said Radha Stirling, a lawyer and founder of Detained in Dubai, a pressure group lobbying on behalf of inmates in the emirate.

The hunger strikers argue that under Article 88 of the penal code they should only serve one sentence instead of several as the offences are so closely related. However, that article is not usually applied to cases concerning checks, where there can be multiple counterparties, said Essam al-Tamimi, a Dubai-based lawyer, who often represents claimants.

In practice, few people serve more than 10 years for financial crimes as inmates are often pardoned before the end of their sentences. Mr. Margetts’ sentence has already been reduced from 49 years.

The hunger strike has underlined the need for reform of the UAE’s financial system, which has tried to build a reputation as one of the world’s leading market hubs. checks remain the bedrock of the financial system, there is no clear bankruptcy law and government officials are still working on a new one. Dubai’s police chief, Dhahi Khalfan, alarmed by the rising number of financial crimes, has called for check cases to be handled on a civil basis.

Yousuf Miki, a Bahraini businessman who has served 40 months of a 29-year sentence, said he was willing to carry on the hunger strike until he died. He was jailed for writing bounced checks worth up to Dh80 million ($21.8 million). “I have a 29-year sentence—I cannot waste my life here,” he said.

British consular officials have visited the jail in Dubai to check on the situation. “The welfare of British nationals in detention remains a high priority,” the embassy said in a statement. “We will monitor the situation closely.”