The Qatar Financial Centre Regulatory Authority (QFCRA) has imposed a fine of QR200 million ($55 million) on First Abu Dhabi Bank PJSC (FAB), the largest lender in the United Arab Emirates (UAE), for obstructing the Authority's investigation into suspected market manipulation by FAB.

The financial penalty imposed on FAB reflects the seriousness of the breaches of regulatory requirements, which have resulted from FAB's deliberate and intentional steps taken to obstruct the QFCRA's investigation.

In March 2018, the QFCRA began its probe into suspected manipulation by FAB of the Qatari Riyal, Qatari Government securities and related financial instruments. 

QFC announces that it has imposed a financial penalty of QAR 200,000,000 on First Abu Dhabi Bank PJSC for obstruction of the QFCRAs investigation into suspected manipulation by FAB of the Qatari Riyal, Qatari Government securities and related financial instruments #QNA pic.twitter.com/KYSfa2HmM2

— Qatar News Agency (@QNAEnglish) August 25, 2019

Under the QFCRA investigation, FAB was asked to provide copies of the relevant trading records and related documentation to allow QFCRA to examine the facts properly. 

However, FAB failed to produce the required documents. Consequently, FAB's failure to comply with the notice to produce the documents and its unwillingness to cooperate with the QFCRA as required, the Authority initiated proceedings on July 29, 2018, in the QFC Civil and Commercial Court (the 'Court') to urge FAB to comply and provide the required documents.

On November 18, 2018, the Court of First Instance ordered FAB to comply, which FAB subsequently appealed to the Appellate Division of the Court.

On May 13, 2019, FAB's appeal was dismissed by the Appellate Division and the order of the Court of First Instance was upheld requiring FAB to produce the required documents.

Despite the Court's orders, FAB has defied QFCRA's statutory production requirements as well as the orders of the Court.

After its appeal was dismissed, FAB issued a public statement on June 19, 2019, that it was withdrawing from the Qatar Financial Centre (QFC) and closing its QFC branch.

FAB, however, has not filed an application to withdraw from the QFC.

Until the firm files an application to withdraw and the application is approved by the QFCRA, FAB's status as a QFC authorized firm will continue, which means that FAB is obligated to comply with the Authority's legal and regulatory obligations.

Earlier in April this year, Qatar had filed a lawsuit against three banks, including FAB, for suspected currency manipulation. Accordingly, Qatar had accused Riyadh-based Samba Financial Group and FAB of being “in league” with their home governments to destabilize Qatar through an “illicit blockade” starting in 2017.

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Cover Image: for illustrative purposes only

Source: QNA