DCG issues warning after ‘runaway’
Dubai resellers lose out after New Silver Star Trading flees market
The Dubai Computer Group has warned its members to be extra careful when extending credit terms following New Silver Star Trading demise from the Dubai market.
The company is alleged to have swindled Dubai-based suppliers of consumer electronics, IT and sundry products valued at AED50m ($13.6m).
The latest ‘runaway' comes after relative calm in the Dubai IT channel that two years ago was rocked by computer traders fleeing the market with unpaid debts.
Shailendra Rughwan, president at DCG confirmed the latest development in an email statement to Channel Middle East that New Silver Star Trading had fled the market last week. "We got to know about New Silver Star Trading last Thursday that there could be some problems, but only came to know the full extent on Sunday that the shops and office are closed and managers were not contactable," said Rughwani.
He reiterated that although New Silver Star Trading has exited the market, it was not a DCG member but a general trading company specialising in IT, mobile phones and other sundry products like textiles.
Rughwani said from the information that the DCG has received, New Silver Star Trading has been operational for two years and started by buying on a cash-on-delivery (COD) basis and after gaining confidence amongst suppliers it secured some credit facilities. "Some of our members have been affected and have lost money following the company's demise from the market but the actual amount is still unclear," he said.
Rughwani explained that the way New Silver Star Trading operated is nothing new to the Dubai market as there has been similar cases in the past. "We are urging our members to be cautious if somebody suddenly starts buying in bulk. It is very important for suppliers to do back ground checks on the person operating the company and where they are selling the products," he said.
He pointed out that if a company is buying locally in big quantities and selling the same goods back into the Dubai market at cheaper prices then there is something wrong. "Unless these back ground checks are done and companies take caution before extending credit terms, such incidents will be repeated in the market," he said.
1022 days ago
Sad and disheartening that few rouge traders create tremors of wrong kinds in the market that have a far reaching impacts on the market sentiments