Dubai reseller runs away
Bur Dubai-based NSK exits channel with estimated AED10m debts
NSK, an IT reseller that operated out of Dubai's Bur Dubai business district has exited the channel after failing to meet its debt obligations, Channel Middle East has been told.
NSK's demise from the Dubai channel comes barely six months after its previous owner Lakhi Bherwani sold his stake in the company to Yashpal Singh, who had until last week, been managing the company since August, 2013.
Sources familiar with the matter have told Channel that Singh fled to India last week after his company couldn't meet its debt obligations, which are estimated at AED10m ($2.7m). NSK is alleged to have swindled several Dubai-based distributors and IT traders operating from Dubai's Computer Street.
Shailendra Rughwani, president at DCG, confirmed NSK's exit from the market in an interview and pointed out that the company was a DCG member up until its previous owner [Bherwani] sold his shares in the company to start another general trading business in Dubai.
Rughwani added that the company had been operational for the past four years. "From the information we have received at DCG, some distributors had secured insurance for the goods they supplied, but unfortunately others didn't," he said. "As DCG, we have intensified our awareness campaigns around credit facilities and continue to help our members to exercise prudence when extending terms to other companies in the market."
Rughwani pointed out that one key issue in the latest runaway case is that the previous owner (Bherwani) didn't inform the DCG, vendors and distributors that he had moved out of NSK and was no longer involved in that business. "Lakhi has all the legal documents that confirm he sold his stake in the company," he noted.
Hesham Tantawi, vice president at Asbis META and an Advisory Panel member at DCG, said while the latest development is sad for the Dubai channel, it highlights the need for greater cooperation between distribution companies in the UAE especially around financial transparency. "There is need for distributors to share information on potential runaways," he remarked. "Credit terms extended to resellers need to be constantly assessed regardless of whether a distributor or reseller is insured or not."