Abu Dhabi court orders manager to repay Dh290,000 after funds misused

The court found that the manager, who had been employed under an open-ended contract with a total monthly salary of Dh17,000, had been granted an official power of attorney to facilitate the company’s business operations. This authority allowed the firm to transfer funds to him periodically to settle fees, pay expenses related to government and third-party procedures, and otherwise advance the company’s work. Evidence presented during proceedings demonstrated that significant portions of these sums were diverted for personal use or not returned as required.

The employer initially sought Dh266,227, representing funds advanced for business activities that were not accounted for, alongside Dh28,077 for mobile phones purchased using company funds but never delivered to the firm. Court records showed that a review of the manager’s handling of the funds revealed multiple discrepancies, prompting the legal action.

Judges ruled that the employee had breached his professional obligations and financial responsibilities, observing that the retention and misuse of entrusted funds constituted a clear violation of trust. The court’s order requires repayment of the full amount along with legal costs, reflecting both the misappropriated sums and associated expenses.

The case reflects broader concerns about corporate governance and financial integrity within the region, where courts have increasingly been called upon to adjudicate disputes over misused corporate assets. Analysts note that the use of powers of attorney, while common in facilitating administrative and commercial transactions, also carries risks if adequate checks and balances are not maintained.

According to the company’s complaint, transferred funds were intended expressly for handling official procedures and company matters, yet internal reviews showed that the manager failed to return remaining amounts after completing or failing to complete assigned tasks. The judge’s assessment highlighted that the failure to account for and return these sums warranted the repayment order as a measure to restore the company’s financial position.

The employer reported that, following the termination of his contract under Article 44 of the UAE Labour Law due to breach of trust and financial misconduct, the manager initially resisted returning company property, including a company car, cards and a laptop. While these items were eventually handed over after the complaint was lodged, the dispute over the funds persisted, culminating in the court’s decision.

Records showed that the manager had, during the period in question, also failed to return a salary advance of Dh14,236 he received while abroad, despite assurances that it would be reimbursed upon settlement of his insurance claim. The company also identified unaccounted transfers totalling Dh9,000 and loans that amounted to Dh243,515, none of which were repaid. Additional discrepancies included payment of traffic fines amounting to Dh2,690 and unreturned sums of Dh5,317 and Dh449, which the court took into account when assessing the total repayable amount.

Legal experts following the case underscore that the ruling serves as a reminder of the importance of transparent financial practices and accountability in roles that involve discretionary handling of corporate funds. They emphasise that powers of attorney should be exercised with rigorous documentation and oversight, to prevent similar disputes and protect both corporate interests and individual rights.

Employers in the UAE and the Gulf region have, in recent years, taken legal action in a variety of disputes involving alleged misuse of company assets and breach of fiduciary duties. Courts typically assess each case on its merits, balancing contractual obligations, statutory provisions and documented evidence of misconduct, to determine remedies that can include repayment orders, compensation or both.