Rimal Gate Capital announced on Sunday that it was withdrawing its Safa Monthly Distribution Certificates, a product holding AED 2.1 billion (about €525 million) in assets. The firm said a review found that its payout system had labelled some returns of investors’ capital as dividend income, overstating the amount generated by the portfolio.
The company has paused monthly payments for 30 days and stopped new purchases. It says holders will be offered redemptions from 16 November, but the amount each receives will depend on the portfolio’s value when their request is processed. The Gulf Markets Commission, the UAE financial regulator, ordered daily updates on the correction and customer notices.
Payments under scrutiny
The error affected distributions made over 22 months, according to the company’s notice to investors. Rimal Gate said AED 640 million (about €160 million) of cash paid out during that period came from selling assets or returning capital, rather than from dividends. It has not yet published a holder-by-holder breakdown or said how much each investor may have to forgo.
The certificates were marketed with a target annual distribution of 7.2%, not a guarantee, but promotional material described them as a way to turn shares in Gulf companies into steady monthly income. The company said it would commission an outside accounting firm to check the figures and would not seek repayment of past distributions while that work continues.
“I planned my rent and medical bills around what they called income. If a third of it was my own money coming back, I need to know before I make another decision,” said Luna D. Badillo, a retired school administrator who moved from Abu Dhabi to Salalah, Oman, last year. She said the payment pause leaves her unsure how much to keep in reserve.
Retirees demand clear figures
Rimal Gate managing director Hannan Zamri-Zamran said the firm had found a mismatch between the source of some portfolio cash and the labels used by its distribution software. “We should have caught this before the certificates reached customers. We are stopping the product now, and every holder will receive an individual calculation,” he said in a recorded video posted by the company.
The fund had 18,600 holders in the UAE, Oman and Bahrain, with about 7,400 living outside the country where they bought the certificates, the firm said. Investors in a group chat shared with this newspaper said they were already comparing monthly payment notices; some had used the cash to meet housing costs in lower-cost destinations, while others treated it as a supplement to pensions.
Paola Antić, a financial adviser in Abu Dhabi, said the product’s central risk was easy to miss when a regular payment arrived on schedule. “A monthly transfer can look like income even when it is partly a sale of the investor’s own assets,” she said. She urged holders to check the redemption terms and wait for their individual figures before making plans around an assumed payout.
The commission said it had barred further sales until the firm completes its review and sends corrected disclosures to investors. Rimal Gate has not said whether it will compensate holders for any losses, or when regular distributions might resume. For customers who moved abroad to live on investment income, the next decisive date is now 16 November, when redemption requests are due to open.
