KARACHI, Feb 16: Hundreds of Pakistani money changers fear losing an estimated half a billion dollars as one of the biggest Dubai-based money exchange house has been closed.

Dozens of money changers have rushed to Dubai to find out what happened to their money and the exchange house they had been trading with.

Some money changers said that the Dubai-based Reems Exchange had been under investigation on charges of money laundering and the Indian authorities were investigating the case.

An Indian newspaper “The Hindu” had published a story a year ago about the founder of the exchange company and accused him of money laundering for Kashmiri militants.

“We are not aware why Reems Exchange has been closed but the closure has put millions of dollars at risk,” said owner of a large money exchange. Reluctant to be quoted in the press, he said his company had no dealing with Reems exchange.

However, dozens of money changers have dashed to Dubai while hundreds are in queue to reach there as quickly as possible. Another money changer said that Reems exchange was not closed by the local authority and it was something like management dispute.

The money changers used to take foreign exchange other than US dollars from Pakistan to Dubai and buy dollars to bring back into the country. The money changers said that their transactions were not being honoured by the Reems for last couple of days and they were not aware about the development.

“I believe that Reems Exchange was in trouble for more than a week but it was closed on Wednesday,” said Amjad, a currency dealer at a local exchange company.

Exchange companies were afraid of accepting that they had been dealing with Reems exchange. They said if the Reems were closed on the charges of money laundering, they may also be put under investigation.

A leading money dealer said that half of Pakistani money changers had business with the Reems and the closure would badly hit their business, while a number of money changers may not continue trading if their money sinks.

However, the stuck up of a huge amount, which they say not less than $500 million, requires identification for the payment. The money changers were completely in dark about the future of their money. One of the money changers said if the Reems was closed by the official authority of Dubai then there was a hope for the return of the money. “If the Reems defaulted on some different reasons then we don’t hope for return of our money,” He said.

Money laundering has been a serious issue in the region and the Pakistani authorities have strict rules to check the transactions. No Pakistani company has any involvement in the money laundering neither any charge was put on any of them.

Hawala and Hundi business have shrunk significantly and the inflows through the banking systems have increased substantially.

According to The Hindu, Nasir Saif Mir, a Kashmiri, had established Reems Exchange in 2002 in Dubai. He was arrested by the Indian police in January 2006.