3rd April 2024 – (Hong Kong) In a city that prides itself on being an international financial hub, Hong Kong recently found itself embroiled in an embarrassing conundrum. The government’s failure to conduct proper due diligence on a purported Dubai prince, Sheikh Ali Rashed Ali Saeed Al Maktoum, who was slated to open a US$500 million family office in the city, has raised eyebrows and sparked a heated debate on the importance of thorough background checks, especially when dealing with high-profile figures from the international arena.

The saga began when Bloomberg, the esteemed financial news agency, reported on Sheikh Ali’s plans to establish a family office in Hong Kong, purportedly one of the first high-profile international investors to respond to the city’s campaign to lure foreign capital. The report portrayed the 28-year-old as the nephew of Dubai’s ruler, Sheikh Mohammed Bin Rashid Al Maktoum, and painted a picture of a well-heeled scion eager to capitalize on the investment opportunities in the Asian market.

However, it soon emerged that Sheikh Ali, who had garnered a strong following in the Philippines as a singer-songwriter under the moniker “Alira,” appeared to have a dual identity that had hitherto been overlooked by both Bloomberg and the Hong Kong authorities. While pursuing his passion for music, Alira has purportedly carved out an impressive singing career for himself. He initially honed his vocal talents through online tutorials before seeking formal training to improve his breathing techniques. Alira’s “versatile six-octave vocal range” allows him to perform in multiple genres – from pop and R&B to opera and light rock. He has released original singles like the clubby “Take Flight” and the uplifting “We Are One,” which he performed at Expo 2020 Dubai. Alira is also adept at putting his own spin on beloved classics across languages including Arabic, Hindi, Tagalog and more. His renditions of popular Filipino songs have gone viral, endearing him to the community. Alira has opened for international acts and relishes the thrill of live performances, working to constantly improve his stagecraft. Through his music, he hopes to spread messages of unity, kindness and finding one’s true purpose. This revelation has raised serious questions about the depth of due diligence conducted by esteemed institutions and the potential consequences of failing to scrutinise the backgrounds of influential figures adequately.

At the heart of this controversy lies the fundamental issue of verifying the authenticity of claims made by individuals, particularly those from wealthy and powerful backgrounds. While Sheikh Ali’s connection to the Dubai ruling family has not been definitively refuted, the lack of readily available information on his business dealings and the source of his purported wealth has cast a shadow of doubt over his endeavours.

The perils of insufficient due diligence are not new to the financial world. History is replete with cautionary tales of investors and institutions falling prey to fraudulent schemes or being misled by individuals with dubious credentials. The consequences of such lapses can be severe, ranging from financial losses to reputational damage that can tarnish even the most esteemed organizations.

In the case of Sheikh Ali, the implications extend beyond the financial realm. Hong Kong, a city that has long prided itself on its status as a global financial centre, risks tarnishing its credibility if it fails to uphold the highest standards of due diligence. The government’s apparent lack of rigorous background checks on a high-profile guest invited to a prestigious summit raises questions about the robustness of its vetting processes.

While the importance of due diligence is widely acknowledged, the practical implementation of such measures can be fraught with challenges, particularly when dealing with individuals from opaque backgrounds or cultures with different norms and practices.

In the case of Middle Eastern royalty, the lack of publicly available information can make it difficult to verify claims and trace the sources of wealth. As one legal professional who has worked with Middle Eastern clients acknowledged, the scarcity of details about the wealth of Middle Eastern royals is “not too surprising,” highlighting the inherent complexities of conducting due diligence in such cases.

Moreover, the allure of attracting substantial foreign investment can sometimes blind institutions to potential red flags or lead them to overlook thorough vetting processes. In Hong Kong’s case, the government’s eagerness to position the city as a hub for family offices and attract high-net-worth individuals may have contributed to a lapse in scrutiny.

The revelations surrounding Sheikh Ali’s dual identity have ignited a heated debate on the government’s responsibility to conduct thorough background checks on guests invited to high-level events. While some argue that it is impractical to vet every attendee at a large summit, others contend that due diligence is a non-negotiable necessity, especially when dealing with prominent figures and substantial investments.

Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, aptly summarised the crux of the issue: “While it may not be feasible to check every guest, improving due diligence is essential, especially as the government is eager to expand into new markets with different cultures and business norms.”

The controversy has also highlighted the potential reputational risks that can arise from questionable associations. As Hong Kong strives to position itself as a premier destination for international investment, its government must ensure that its efforts are not undermined by inadequate vetting processes or associations with individuals of dubious backgrounds.

As Hong Kong continues to court international investors and family offices, it must strengthen its vetting protocols to ensure that potential partners are thoroughly vetted, and their claims are substantiated by verifiable evidence. This may require investing in more robust due diligence capabilities, leveraging advanced technologies, and fostering closer collaborations with international agencies and intelligence networks.