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Bahrain’s highest court has upheld the eight-year prison sentence of a well-known businessman who embezzled more than six million dinars from 352 investors through his crowdfunding platform.
Although it upheld the confiscation of BD6,831,205 – the amount embezzled – from his property and assets, the Cassation Court reduced the amount he was ordered to pay in restitution to the victims from BD6,831,707 to BD3,821,846.
Judges based the reduction on the case’s final audit issued by the Central Bank of Bahrain (CBB), which showed that the appellant had already returned BD2,000,689.
Three of his company’s top officials – the chief executive officer and two board members – also lost their final appeals. Their one-year prison sentences had been replaced with community service at an earlier stage of the appeal process. A BD5,000 fine was upheld.
Furthermore, the court rejected the Public Prosecution’s appeal to impose an extra fine of BD320,000 on the three men, ruling that the funds had legitimately entered the company’s accounts and were invested as presented to clients.
Last December, the High Criminal Court found the Bahraini businessman guilty of forgery, money laundering and defrauding people who invested their funds through the platform.
The three company officials were convicted of aiding him in the scheme. Upon appeal, the Supreme Criminal Appeals Court overturned their jail time, replacing it with an alternative penalty.
The court also ordered all four appellants to jointly pay BD813 to the accountant who carried out an updated audit, a ruling that was upheld in the second appeal.
The CBB ordered the immediate suspension of all Safaghat WLL services in January 2025 and placed the company under its administration in June 2025.
The GDN earlier reported that the investment company implicated in the case is owned by the main suspect’s highly successful parent company, which remains under sequester, according to the commercial registration (CR) portal Sijilat.
A tip-off from the National Centre for Financial Investigations, that the suspects had tricked individuals into investing in the company through bogus and falsified business deals, sparked the probe.
The centre had received a financial report indicating that the owner had carried out a number of suspicious transactions, including submitting dud cheques to the company’s accountants, withdrawing funds from its accounts without clear justification and making payments that were not covered by any written contracts.
He allegedly used several registered companies as fronts, falsely claiming that their owners needed funding to expand their businesses before presenting them as investment opportunities to his targets.
“When the investors agreed to finance the businesses, he swindled the money they put in, using the funds to his own advantage, carrying out transactions to lend them legitimacy,” read an earlier statement.
Prosecutors earlier stated that the three co-defendants had abetted him in committing the crimes by enabling him to ‘execute his criminal project’ through their various specialised roles in his companies. They accused the three of knowing about the scheme but failing to alert investors, thereby allowing the owner to pocket the money.
The CBB audit stated that the defendant had written and signed the cheques, making them payable to himself. He used the embezzled money to pay off debts and loans, the court heard.
The businessman’s assets were frozen, and the prosecution appointed a manager to administrate his holdings. He was also banned from leaving the country.
Three attorneys representing the 352 victims had earlier requested court documents to pursue civil litigation after the conclusion of the trial.
During the proceedings, prosecutors reasoned that the extra fine was to compensate for the corporate officials’ participation in the embezzlement, particularly in the final two investment deals, worth BD320,000.
In an earlier statement, the Public Prosecution called the High Criminal Court’s decision to fine the main defendant, but not the other convicts, ‘an erroneous application of the law’.
However, the argument was rejected by the appeals judges, who ruled that the prosecution’s request was invalid.
zainab@gdnmedia.bh
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