Phoenix Commodities now in liquidation was valued at more than $1bn in January

Phoenix Commodities, the trading and distribution group that was placed into liquidation last month with debts of more than $400 million (Dh1.47 billion), was valued at $1.1bn-$1.24bn as recently as January, according to a document filed by its provisional liquidators.

The valuation, provided by Deloitte India based on the company's June 2019 accounts, show the speed at which currency trading losses incurred by the company's financial derivatives desk in Dubai led to its decline.

Phoenix Commodities, which was registered in the British Virgin Islands but had its main operating entity, Phoenix Global DMCC (PGD), in Dubai, was undone by "accrued losses incurred by its financial derivative trading desk" in February and March, according to the document seen by The National.

“As losses continued to accrue on PGD’s open trades so did the requirement for the company to post margin calls in the form of cash collateral which it was unable to meet,” the document said, adding the situation was exacerbated by counterparties who were unwilling to let the firm close its trades.

Phoenix Commodities began as a rice trading business in 2001. Its executive chairman, Gaurav Dhawan, became the majority shareholder in 2006 and expanded its activities.

The group grew turnover to $3.1bn and made a $43.5m profit last year, according to management accounts provided to the provisional liquidators. It had three main divisions - agrifoods, resources (coal and metals trading) and consumer brands.

A company brochure claimed the business was the second-biggest rice trader in the world, but its diversification saw more than 100 corporate entities set up employing over 2,500 people globally.

The company moved into packing and distribution for other firms and created its own consumer brands, including the Zarah pulses range and a line of biodegradable refuse sacks known as Enviro Care produced at its own plastics factory in Ajman.

The company engaged restructuring firm Quantuma in March to undertake a review of its finances as the scale of the trading desk's losses grew, and directors attempted “a last ditch financial restructure” of its balance sheet, which ultimately failed and led to the appointment of Quantuma and KRyS Global as provisional liquidators on April 20, according to a document filed by its provisional liquidators.

Their assessment of the company’s financial position indicated that creditors are facing a substantial shortfall, as the company has assets with a book value of $136m (most of which is inter-company debt) but liabilities of more than $416m, over $400m of which is related to foreign exchange losses.

A meeting of creditors in the British Virgin Islands on May 8 voted to appoint Matt Smith and Ryan Jarvis of Deloitte as the company's joint liquidators, a Quantuma employee told The National. A spokeswoman for Deloitte confirmed the appointment of Mr Smith and Mr Jarvis, but declined to comment further.

Dubai Multi Commodities Centre, the authority responsible for the free zone from which Phoenix Global traded, declined to comment. Mr Dhawan did not respond to requests from The National to comment.

In an April 20 email to all staff, seen by The National, Mr Dhawan said the company was impacted by the Covid-19 outbreak which caused delays to goods and payment, and that "the situation got compounded many times through a massive payout required in the financial markets team, which completely shocked us and severely impacted the cash flow of the company".

Mr Dhawan's email said he had flown to London in mid-March in a bid to resolve the company's issues but that Covid-19 restrictions meant he remained there since.

Thus far, three banks in the UAE – First Abu Dhabi Bank, Emirates NBD and Mashreq – have reported exposure to Phoenix Commodities and its subsidiaries totalling $108.6m. Last week, the Financial Times reported that UK-headquartered lenders HSBC Holdings and Standard Chartered were also owed millions by the company.

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Key figures in the life of the fort

Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.

Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.

Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.

Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.

Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.

Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.

Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.

Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.

Sources: Jayanti Maitra, www.adach.ae

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The flights Fly Dubai, Air Arabia, Emirates, Etihad, and Royal Jordanian all offer direct, three-and-a-half-hour flights from the UAE to the Jordanian capital Amman. Alternatively, from June Fly Dubai will offer a new direct service from Dubai to Aqaba in the south of the country. See the airlines’ respective sites for varying prices or search on reliable price-comparison site Skyscanner.

The trip

Jamie Lafferty was a guest of the Jordan Tourist Board. For more information on adventure tourism in Jordan see Visit Jordan. A number of new and established tour companies offer the chance to go caving, rock-climbing, canyoning, and mountaineering in Jordan. Prices vary depending on how many activities you want to do and how many days you plan to stay in the country. Among the leaders are Terhaal, who offer a two-day canyoning trip from Dh845 per person. If you really want to push your limits, contact the Stronger Team. For a more trek-focused trip, KE Adventure offers an eight-day trip from Dh5,300 per person.

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Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year

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Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30

Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse

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Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances

How to avoid crypto fraud

Use unique usernames and passwords while enabling multi-factor authentication.
Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
Avoid suspicious social media ads promoting fraudulent schemes.
Only invest in crypto projects that you fully understand.
Critically assess whether a project’s promises or returns seem too good to be true.
Only use reputable platforms that have a track record of strong regulatory compliance.
Store funds in hardware wallets as opposed to online exchanges.

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