Dubai Fraud Trial – Lawyer asked the court to subpoena Hussein Sajwani, the owner of Damac Properties

originaL source The National
DUBAI // Defence lawyers in the Sama Dubai fraud trial tried to use the fallout from the recent restructuring of Dubai World to make their case to the Appeals Court yesterday that their client should not be tried as a public official.

AM, 42, an Emirati and former senior executive at Sama Dubai, was acquitted of charges of breach of duty in July.

Last month the public prosecution asked that he be retried, saying his acquittal came because he had been tried as a private employee.

The prosecutor, Abdel Rahman al Memari, told the court that since Sama Dubai was owned by Dubai Holdings – owned by Sheikh Mohammed bin Rashid, the Ruler of Dubai and Vice President of the UAE – AM should instead have been tried as a public official.

In that case, Mr al Memari said, AM would have been legally required to declare commissions he received, including five apartments valued at Dh2.7 million (US$735,000), and Dh200,000 in cash.

If accepted, that claim would have significant repercussions for a number of the fraud cases currently working their way through the Dubai courts, as many of the defendants could similarly be considered to be public officials.

However, in court, the defence pointed out that since Dubai World’s restructuring was announced last month, officials had stressed the arm’s-length relationship between the Government and some of the emirate’s biggest companies.

For the defence, Ali al Shamsi reminded the three Appeals Court judges of government statements saying it would not guarantee the debts of a conglomerate owned by Sheikh Mohammed.

“The recent press statements issued by government officials about the company owned by the Ruler of Dubai are a clear indication that these companies are not government-owned entities,” said Mr al Shamsi.

He referred to a television interview given by Abdel Rahman al Saleh, the director general of the Dubai Department of Finance, in which Mr al Saleh said: “Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the Government, which is not correct.”

Mr al Shamsi told the court that Dubai Holdings, like Dubai World, was not owned by the Dubai Government.

Its subsidiaries were registered as limited liability companies, he said, meaning that AM could not be charged as a public official.

Meanwhile, Saeed al Ghailani, who is representing a Syrian Damac property development manager, AH, 32, in the same trial, asked the court to subpoena Hussein Sajwani, the owner and chief executive of Damac Properties, to be cross-examined.

AH is accused of being complicit in the alleged bribes of the Sama Dubai employees as well as accepting Dh650,000.

Mr al Ghailani said his client acted according to the instructions of the owner of the company, Mr Sajwani.

The trial was adjourned until January.

Sama Fraud Case Dubai, Damac Properties Dubai, Fraud Trial Dubai

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Emirates Press Law and the Media Blackout

source arbabMediasociety October 2009

On May 29, the London-based daily The Independent published an article entitled Dubai property scandal claim emerges amid media blackout. According to the report, a group of investors who had bought properties in buildings by Al Fajer Group, a company run by Sheikh Maktoum bin Hasher Al Maktoum, held a press conference to accuse the developer of fraud, according to The Independent.

The investors allege that the developer Al Fajer Properties showed them photographs of buildings it claimed were Ebony 1, Ivory 1 and Ivory 2, but were in fact buildings belonging to another developer.

The investors were demanding a refund totaling GBP86 million.

Unfortunately, the investors didn’t get the sort of press they had hoped for.

Incidentally, Sheikh Maktoum bin Hasher Al Maktoum is the brother-in-law to the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, and soon after the press conference finished, Dubai government officials warned news agencies against publishing articles on the press conference.

“I had written half of the article when I was told by my editor to stop,” a Dubai-based reporter told The Independent. “The investor’s group has records of payment, and it’s obvious that they have been shafted, but we can’t write about it.”

Why?

Because a member of the royal family is directly involved.

To date, we have not received updates from Al Fajer Group regarding the allegations made against the company.

Rather than view Sheikh Maktoum bin Hasher Al Maktoum as a businessman who may have been involved in conning investors out of GBP86 million, the government views him as a royal first, a businessman second.

And herein lies one of the media law’s biggest problems: most UAE royals hold government offices and executive positions in companies throughout the Emirates. In fact, most UAE-based companies have some connection, either directly or remotely, to members of the royal family.

How, then, can the media ever hold these individuals accountable for their actions, if stories (albeit negative ones) cannot be published if they involve a royal?

Sadly, the draft media law won’t help with this conundrum, and it certainly won’t help with future torture tape cases either. Article 32, which makes criticizing government officials and royals illegal, is artfully ambiguous. According to HWR’s report, “[such] a vague law invites self-serving interpretation by the government, and with courts that have proven compliant in harshly regulating speech, the result will be continued anxiety, self- censorship, and arbitrary enforcement of the law in the UAE. It appears designed to insulate the government from public accountability and criticism and would deter investigative journalism and undermine the media’s role as public watchdog.”

According to Samer Muscati, the HWR is putting together a new report, because “the situation is more dire than we anticipated.”

It is dire, especially given that in spite of local restrictions on content, the world press can write and say what they want about the UAE, without ever succumbing to the country’s media laws. And the stories the government doesn’t want the local media to publicize, are being publicized anyway by journalists around the world.

Due to the Internet, the only way to prevent the press from airing your dirty laundry in public is by not having any dirty laundry in the first place.

Interestingly, the draft law is still pending approval. One has to wonder why a country that passes laws so quickly compared to other nations has taken its time with this one.

“I’m hoping that the reason why they haven’t signed the law is because they’re going to amend it,” said Muscati. “They need to reevaluate the law and take the recommendations that we’ve given them.”
It is unclear why the draft law hasn’t been passed. Repeated efforts to contact the NMC for an explanation yielded little more than assurances that the government is working on finalizing the law.
However, transparency was never one of the UAE’s strong points, which is ironic given its desire to maintain its status as a regional business hub. Without transparency, and without press freedom to report on political, business-related and social issues, the UAE is unlikely to repair its mired reputation.

Since the financial crisis hit the region in September 2008, bringing the nation’s billion dollar real estate industry to its wobbly knees, the UAE’s credibility as a stable and profitable developing nation was compromised. Dubai, more so than Abu Dhabi, had over stretched its budget. To date, no one knows how much debt the emirate raked up, but occasional disclosures hint at a distressed economy. Earlier this year, Dubai admitted to owing $80 billion, although analysts suspect the number is higher. Clearly, without the government providing accurate numbers, speculators will assume the worst.

Given Dubai’s drive to raise itself from the economic bog it created running up to the financial crisis, honesty and transparency are tantamount. And without the media’s involvement in reporting information about Dubai and the UAE’s news, any effort to regain investor confidence is slim.

In fact, keeping close tabs on the media, like it does with its companies, will only prove that in spite of the lessons the financial crisis has taught the business world, the UAE hasn’t grasped them yet.

read the full article here

Fraud in Dubai and the Gulf Region – Just the tip of the iceberg

source The National

It is more than a year since Dubai launched a highly publicised clampdown on corruption, which led to the arrest of several executives from some of the emirate’s top property developers and financial institutions.

But while Dubai grabbed the international headlines, it represented just the tip of the iceberg in a region that has been identified as a hot spot of corruption.

Kroll, an international risk consultancy, said last week the Middle East was the world’s only region to see a rise in fraud in the past year. It singled out corruption and bribery as the single largest threats.
“For seven out of 10 cases of fraud, it had the highest incidence of any region, including bribery and corruption,” Kroll said. Average financial losses from corruption doubled to US$11.5 million (Dh42.2m) this year from $5.6m last year, it said.

read more of this article….

Dubai`s off-plan buyers cash at high risk – Delayed Projects axed

source  MaktoobBusiness

DUBAI – Many real estate projects claimed to be on hold due to the collapse of the UAE’s property market have actually been cancelled, but developers do not want to admit this because then they will have to return investors’ money, industry observers say.

Observers also question some developers’ ability to repay investors when projects are finally cancelled, with the prospect of buyers losing millions of dollars.

“In the 18 months before the downturn a number of projects were announced that were not financially viable and therefore unlikely to see completion,” said Tahir Akhtar, chairman of Dubai Business Advisors, who has invested in projects across the UAE.

“Developers do not want to admit this because then they will have to return the funds.”

Billions of dollars worth of developments were launched during the UAE’s real estate boom, which had seen property prices close to double by mid-2008 from the start of 2007.

The boom was driven by speculation and easy credit, with developers funding the construction of projects through off-plan sales.

When the global financial crisis gripped the country’s real estate market prices plummeted as financing and demand dried up, leaving developers unable to fund construction.

UNDER REVIEW

Many developers have put projects on hold or have said they are reviewing projects, but few have come out and outright cancelled projects.

“If they (developers) say it’s cancelled they will have to repay the money to clients. Probably for that reason they are saying it is still on hold,” said Charles Neil, CEO of property consulting firm Landmark Advisory.

Michael Shvo, a well-known luxury real estate marketer from New York, said a developer told him privately a project that is “officially” delayed is actually cancelled, declining to name the developer.
 
“A developer told me that officially the project is on hold, but it is actually cancelled,” Shvo told a conference at Cityscape Dubai earlier this month, prompting him to call for greater transparency.

The number of real estate projects cancelled or on hold stood at around $408 billion in September, up 18 percent from $346 billion in April, according to the Kuwait Financial Centre.

The Centre, also known as Markaz, said it expects cancellations to rise further in Dubai due to the continued lack of financing and uncertain economic outlook.

UAE real estate regulations vary from emirate to emirate, but currently there are no laws governing how long a project can be on hold before a developer must refund investors’ money.

In Dubai, the UAE’s most developed real estate market, authorities are in the process assessing which projects are unviable and should be cancelled, with the findings due out before the end of the year, according to the Real Estate Regulatory Agency (RERA)

Developers are not allowed to cancel projects in Dubai without the approval of RERA and the Dubai Land Department, RERA said, adding that if a developer does get approval to cancel a project it would have to reimburse investors. 

“It will vary from project to project as which ones will go ahead. Some will end up with half-completed buildings and some may not start (at all),” Landmark’s Neil said.

INVESTOR CONCERN

Investors have become increasingly vocal in voicing their concerns about delayed projects, calling on developers to transfer their investment to another project or refund their money.

Larger companies such as Emaar Properties and Nakheel have set up schemes that allow buyers to swap their investments between projects, but smaller developers lack the project portfolio to offer an alternative, analysts say, leaving investors at risk of losing their money.

Dubai Business Advisors’ Akhtar said a group of investors he belonged to stood to lose around 150 million dirhams ($40.8 million) from projects in the UAE emirate of Ajman that now look like they may not go ahead.

“Not a lot has been done to protect investors,” he said.

Dubai brought an escrow account law into force in mid-2007 in an effort to better protect investors – requiring developers to hold buyers’ money in a special bank account until the completion of a project – but many projects had been launched prior to the law, and other emirates were even later in introducing similar regulations.

“Most projects that fall under the escrow provisions of RERA have an established level of comfort and protection. Those projects that are not covered by escrow are a different situation,” said Blair Hagkull, regional managing director of Jones Lang LaSalle.

Al Fajer Properties – The former CEO of Al Fajer Properties Shahram Abdulla Zadeh was jailed in 2008 – Today 2009 President of Al Fajer Maktoum Hasher bin Juma Al Maktoum – A part of the Dynasty Zarooni Scandal ?

http://online.wsj.com/article/SB123457503562586691.html

DUBAI — Amid the movers and shakers of this glittering city, Shahram Abdullah Zadeh cut a wide swathe. He cruised around town in a white Bentley and dined with royalty as his company developed one of the emirate’s premier office complexes.

But last February, a phone call from Dubai’s state security effectively ended it all.

Hauled in and locked up for 60 days, Mr. Zadeh says he was interrogated about his role in Dubai’s freewheeling real-estate sector and his business relationship with the brother-in-law of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum. When released, Mr. Zadeh says he had been frozen out of the real-estate company he had helped start.

Mr. Zadeh’s experience, compiled though court and company documents, offers a rare window into the murky business world that helped transform this city from an empty coastline into a metropolis. It also may offer a cautionary tale for investors lured to the city, which bills itself as the modern face of a new Middle East. Dubai is one of seven semi-autonomous emirates that make up the United Arab Emirates.

The U.S. government and human-rights groups have long criticized the judicial system in the U.A.E for a lack of independence and oversight. In the good times, investors didn’t fret much about these shortcomings. Now, some of the same deals that helped build Dubai are coming undone — in particular, a tradition of off-the-book business partnerships between Emirati citizens and elite expatriates like Mr. Zadeh, who was born in Iran.

Mr. Zadeh claims his detention came after a business dispute with his partner at Al Fajer Properties, Sheikh Hasher bin Juma’a Al Maktoum and his son, Sheikh Maktoum bin Hasher al Maktoum. Both men are members of the extended family of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum. Mr. Zadeh alleges the two men took control of the firm while he was in custody, according to a lawsuit he filed with Dubai’s public prosecution office last year.

Mr. Zadeh has not been charged with a crime. But for the past year, authorities have held onto his passport, making it impossible for him to travel or find work.

“I used to believe in the miracle of Dubai. But now I see it all as a mirage,” said Mr. Zadeh, 37. Sheikh Hasher denies any wrongdoing. He says he was not responsible for Mr. Zadeh’s jailing and that he removed him from the company because Dubai authorities said he had offered bribes, an allegation Mr. Zadeh denies.

“I don’t need to defend my reputation. He does,” Sheikh Hasher said in a telephone interview. “This man is crazy. He is a crook with a sweet tongue.”

Some of Mr. Zadeh’s claims are impossible to verify independently. His only copy of the real-estate partnership agreement is missing, and official company documents show the Sheikh Hasher as sole owner. Dubai’s security services, the public prosecutors’ office and the Dubai ruler’s court all either declined to comment or didn’t respond to repeated requests for comment.

Last fall, the Emirates’ Human Rights Association, a government body, wrote to authorities asking for an explanation about why Mr. Zadeh’s passport was being held. The group did not receive any response, according to his lawyers.

Mr. Zadeh grew up in Dubai, attending school with the children of some of the city’s top families. He managed his family’s hotel and retail holdings and decided to go into business himself in 2000. Real-estate development was off limits to foreigners, even longtime residents like himself. So, he turned to a common practice — a silent partnership with a U.A.E. citizen.

Typically, such partnerships involve an Emirati acquiring a business license and then granting his foreign partner management control. The foreigner either pays an annual fee to the Emirati or the two share profits. The terms are set forth in a parallel set of documents, separate from those submitted to the government. Such contracts are so common that courts here have upheld them in disputes, according to commercial lawyers here.

In 2004, an old friend of Mr. Zadeh’s father brokered an introduction with Sheikh Hasher. The sheikh owns Al Fajer Enterprises, a conglomerate that includes a large construction and contracting arm.

In affidavits filed with Dubai’s prosecution office, Mr. Zadeh contends that he and Sheikh Hasher verbally agreed to a partnership, signing a contract on Feb. 1, 2006. The partnership, Mr. Zadeh says, established the two men as co-owners of Al Fajer Properties. The men would split profits equally and would invest equal amounts of capital. The contract named Mr. Zadeh as chief executive.

Mr. Zadeh provided $335,000 in start-up capital, and he invested another approximately $30 million in the company, according to bank documents reviewed by The Wall Street Journal. Mr. Zadeh’s affidavits contend Sheikh Hasher didn’t contribute any capital. Sheikh Hasher denies the equity partnership ever existed.

Business took off quickly. One of Al Fajer’s biggest projects was a planned $750-million development of five office towers, set just inland from Dubai’s man-made, palm-tree-shaped island. Mr. Zadeh bought three of the five plots for the 40-story towers with his own money, according to financial documents. With investors lined up for units, he then awarded $215 million worth of contracts to the construction arm of Sheikh Hasher’s Al Fajer Enterprises, according to company documents.

But by late 2007, the contractors were behind schedule, according to company documents and former employees. Al Fajer Properties was facing fines for the delays, and buyers were starting to complain. Sheikh Hasher wanted payments to continue to his companies, but Mr. Zadeh claims he said no. The sheikh complained in a series of text messages that unless Mr. Zadeh released more cash, his contracting companies would go bankrupt.

On Feb. 21, 2008, Mr. Zadeh claims, he received an unusual phone call from State Security, asking him to come in that evening for a talk. When he arrived, , he claims that police blindfolded him, put him into a sport-utility vehicle and drove him to a detention center.

In the eight weeks he was jailed, Mr. Zadeh says he was never accused of a specific crime or shown an arrest warrant. Instead, he says, he was repeatedly interrogated about his personal life and Al Fajer’s operations, and gave his interrogators the combination to the company’s safe after they asked for it. “They told me that if I did not cooperate that they would ruin me,” Mr. Zadeh said.

Mr. Zadeh contends the only copy of his partnership agreement with Sheikh Hasher was in the safe. Former employees of Al Fajer say the company safe was emptied while Mr. Zadeh was jailed.

On March 6, Sheikh Hasher’s son, Sheikh Maktoum, was named the new chief executive of Al Fajer Properties. Sheikh Hasher hired international accountants to audit Al Fajer’s books, according to former employees. He then presented the findings to employees and select clients, accusing Mr. Zadeh of embezzling funds. Phone calls and emails sent to lawyers and accountants of Al Fajer Properties were not returned.

Sheikh Hasher says Mr. Zadeh stole money from him, but did not provide evidence, or the audit, to back his claim. Mr. Zadeh denies it.

Prosecutors refused to investigate the case, citing an order from Dubai’s attorney general, an official appointed by the ruler. In November, Mr. Zadeh tried one last option. He approached the ruler’s diwan, or court administration, and asked for mediation from Sheikh Mohammed himself.

So far, there has been no reply.

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Where Are The Locals?

Forbes     March 11, 2009

Seven suspects have reportedly been singled out by the authorities, but all of them are foreigners.

Dubai’s anti-corruption probe seemed in full swing Tuesday, after seven expatriate businessmen were reportedly accused by prosecutors of taking part in a $500.0 million fraud at Dubai Islamic Bank. The suspects included three Britons, two Pakistanis, one Turk and one American, according to the Associated Press, raising concerns that local Emiraatis might not be held as fully accountable as the expat brigade.

“Some might say that it’s evidence of the anti-corruption drive, but again, where are the Emiraatis?” wondered Christopher Davidson, a British academic who has authored several books on Dubai and the United Arab Emirates. “There have to be the local sponsors, the line managers, the people whose desk at which the buck stopped.”

The alleged fraud involved a company called CCH, which according to reports was linked to some of the named suspects and may have forged documents to fraudulently obtain funds from Dubai Islamic Bank. The bank issued a statement on Tuesday claiming its exposure to CCH was around $330.0 million and that it was chasing down assets “in a range of countries.”

The former chief executive of Dubai Islamic Bank, Saad Abdul Razak, was reportedly taken into custody last year for questioning, as part of the authorities’ probe of the real-estate sector, but his name does not seem to have made the final list. Press reports claim that a handful of local Emiraati executives have also been interrogated, including Sami al-Hashemi, ex-CEO of real-estate developer Mizin, and Abdul Salam al-Marri, head of the Lagoons development on Dubai Creek.

Although Dubai’s defenders cite the example of a former cabinet minister, named in press reports as Khalifa Mohammad Bakhit al-Falasi, who was sentenced to two years in jail in February for an unrelated case of fraud and embezzlement, the truth is that very few local Emiraatis have been charged or punished as a result of such investigations.

Expatriate businessmen have also accused the Dubai authorities of torture and detention without charge, including Zack Shahin, ex-CEO of Dubai Islamic Bank’s real-estate subsidiary Deyaar Properties, and Shahram Abdullah Zadeh, former manager of developer Al-Fajer Properties. (See “Desert Storm In Dubai.”)

Zack Shahin is still behind bars and still has not been charged, according to one of his American lawyers, James Pitts, who told Forbes that there were around 40 other foreign businessmen in a similar situation in Dubai.

When asked whether Shahin might have provided names to the authorities in exchange for a lighter potential sentence, or exemption from the charge sheet, Pitts replied: “I am certainly not aware of any such arrangement.” 

Read also: Desert Storm in Dubai

Read also : Madoff of The Mideast Denies Charges 

Dubai – Forbes – Al Fajer Properties Scandal – Battle over the Books – Behind the $870 million ”rescue” of a royal developer

original published Forbes

March 08. 2009 12:36AM UAE / March 8. 2009 8:36PM GMT

On Feb. 3, Al-Fajer Properties, a high-profile real estate development firm owned by the brother in law of Dubai’s ruling sheik, announced a 3.2 billion dirham ($871.2 million) restructuring of its operations. Under the leadership of its new president, Sheik Maktoum bin Hasher al-Maktoum–the eldest son of the company’s owner, and nephew of Dubai’s ruling sheik–the company explained it had liquidated its land bank and sold off its remaining inventory after a “rigorous” business review in order to strengthen its balance sheet.

But sources close to Al-Fajer tell Forbes that the restructuring was actually a wholesale “rescue” from financial ruin as an independent entity, after nearly three years of alleged mismanagement under former manager Shahram Abdullah Zadeh, a flamboyant, Iranian-born businessman who was fired last year and who claims to still be owed at least $1.9 billion by Al-Fajer.

Forbes has consulted documents–including bank statements, company contracts and employee interviews drafted by an auditing firm, which was called in to help conduct the business review last year–that purportedly tell the story of how Zadeh allegedly forged company contracts, kept fraudulent, unaudited accounts and moved money back and forth between Al-Fajer Properties and other companies owned by him.

Sources close to Al-Fajer say the new president, Maktoum, was called in by his father to fix the so-called “financial shambles” after an employee indirectly alerted the elder sheik to the company’s financial situation by requesting cash in early 2008. Documents show a cash balance of approximately $8.2 million when Maktoum arrived, which was restored to $163.4 million to $190 million 60 days later.

The sheik, say sources close to the company, did this by unwinding investments that would have saddled Al-Fajer with massive liabilities–in the “hundreds of millions” of dirhams–narrowly escaping the real estate slide that hit Dubai months later after the collapse of U.S. investment bank Lehman Brothers in September. Since then, property prices have fallen an estimated 20% to 25%.

Al-Fajer’s cash balance as of February 2009 was not made available to Forbes, but sources close to the company hint that nearly all of it has been plowed back into construction projects.

Zadeh flatly denies any wrongdoing and claims that the so-called “rescue” was a full-blown theft of a company he had owned and financed alone throughout the course of its existence. Moreover, he denies that the company was a financial mess and claims that his erstwhile partner, Maktoum, breached his trust to take control of a successful firm.

Comment On This Story

“I was the sole investor, and Al-Fajer Properties was my company,” he says. “Sheik Hasher Maktoum has not invested a single dirham into the company; his only contribution has been the real estate license.”

The payment for this license, which cost $82,000, sat in a bank account from the company’s inception in 2004 and was not used as operational capital, Zadeh says.

Zadeh claims that Maktoum, his father and others together “cooked the books” and took control of Al-Fajer Properties while he was detained in jail by the authorities, without being charged, between February and April 2008. After being blindfolded, tortured and interrogated for weeks about unfounded bribery allegations and his operations at Al-Fajer in detail, Zadeh says he emerged from jail only to find a letter demanding he cease all involvement with the company.

Zadeh says he believes his detention was the result of a false report. Sources close to Al-Fajer say that any such claims did not come from them.

The battle has already spilled into the courts, a potentially embarrassing development for a company linked to Dubai’s ruling family. After filing two unsuccessful criminal complaints against Al-Fajer last year, Zadeh said his lawyers filed a civil lawsuit against the company on Feb. 26 at the Dubai Courts, claiming he was still owed $1.9 billion.

Although Al-Fajer Properties is said to have filed a criminal complaint against Zadeh in late February, alleging fraud and embezzlement of funds, the company’s lawyer would not confirm this. “I am aware of no suits against me,” Zadeh says.

Zadeh does not deny moving funds between Al-Fajer and other companies he owns, but claims that he put the money into the company’s account in the first place and later took it back as his “investment.” He said that no money was missing, though he admitted there had been no auditing of the company accounts because the firm was understaffed and had big ambitions.

Sources close to Al-Fajer also confirm that no money appeared to be missing; Zadeh is said to have made up the balance of withdrawn funds with later payments back into the firm.

The corporate tussle casts no direct shadow on the reputation of Dubai’s ruling family, even though Al-Fajer’s operators are one degree removed from Sheik Mohammed bin Rashid al-Maktoum. But it’s another example of the dark side of Dubai, one more blow to its image as a spectacular hub for global investment. After recently being forced to borrow $10 billion from the United Arab Emirates’ central bank in Abu Dhabi to help its enterprises pay short-term debts (see “Dubai’s Jolt Back To Reality”), Dubai is bracing for more bad news as its gross domestic product growth plunges from 8% or so in 2008 to an expected 2.5% this year.

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Al Fajer Properties – Dynasty Zarooni – Ebony Ivory case – Dubai Court grants bail to Kabir Mulchandani

source GulfNews May 21, 2009

Dubai: Dubai Public Prosecution has granted bail to a senior executive of a real estate company who is being interrogated over alleged financial irregularities, Gulf News has learnt.

“The Dubai Public Prosecution granted bail to Dynasty Zarooni Real Estate’s Chairman Kabir Mulchandani. yesterday, but the interrogation continues over his alleged fraud and swindling charges,” a senior public prosecutor told Gulf News on Thursday.

Lawyer Eisa Bin Haider confirmed that his client was released on bail on Thursday.

The Case Dynasty Zarooni – Al Fajer Properties
Jumeirah Business Centre 7,8,9 -
Ebony Ivory Towers – Jumeirah Lake Towers

The Public Prosecution has been questioning Kabir Mulchandani., an Indian, and the firm’s president, an Emirati national, Hilal Al Zarooni, over alleged fraudulent charges.

Salem Al Sha’ali, the legal representative of investors who were reportedly swindled, said earlier some of his clients lodged nearly 30 complaints worth millions of dirhams against the suspects.

More about this case Dynasty Zarooni - Al Fajer Properties ( Jumeirah Business Centre – complaining investors) from the past

Shahram Zadeh against Al Fajer Properties Maktoum Hasher Juma Al Maktoum – Comment of the Month

April 10, 2009 comment from Salahudin

I am a lawyer & familiar with such disputes known as financial cases.

Its actually very simple, the judge has to appoint an Accounts Expert (Court Appointed Auditor), to examine the accounts of Al Fajer Properties, and it will be very clear if Sheikh Hasher Maktoum has invested anything. I believe the lawyer of Sheikh Hasher Maktoum, Sheikh maktoum Hasher & Al fajer will do their best to close the case before the court appoints an Expert to avoid the embaressement.

If Sheikh Maktoum Hasher Al Maktoum succeeds in closing the case without the court Auditor examining Al fajer accounts, then it will be a big loss to dubai justice system because it shows they are afraid the truth will come out!!!

Sheikh Hasher Maktoum should be smart and try to settle the case with Dr.Zadeh Shahram before it becomes a nationalembaressement for Dubai ruling family.

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April 10, 2009 comment from Tom

If the sheikhs win this case, it will be the end of foreign investor’s trust in dubai. This will be a test for dubai, is it really a safe & secure investment hub as they portray it???? Or the laws are not applicable to the ruling family?

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April 10, 2009 comment from Al Fajer Victim

This is going to be a test case for dubai. This will reveal the depth of the corruption & behind the scenes torture, illegal arrest, fabrication of cases, all to protect the few sheikhs like sheikh hasher maktoum & his well known crook son who just thursday threatened me in front of my wife that if I complain about al fajer “it will have very bad consequences, I don’t want you to disapear” Shame on you sheikh maktoum hasher, you are nothing but a thief with everyone.

Comment of the day

Comment by “Criminology Professor” to Al  Fajer Properties – April 8, 2009 – Dubai court postpones 1,9 Billion Dollar case against Sheikh Maktoum Hasher bin Juma Al Maktoum, Sheikh Hasher Maktoum Juma Al Maktoum and Sheikha Maryam

In criminology, state crime is activity or failures to act that break the state’s own criminal law or public international law. For these purposes, A “state” is defined as the appointed officials, the bureaucracy, and the institutions, bodies and organisations comprising the apparatus of the government. In this situation the sheikh is not alone, the role of the state as one of the possible perpetrators of crime whether directly or in the context of state-corporate crime must be examined.

One way of examining state crimes is to study the occurence of a trend by the state security forces, whether the state respects human rights in the exercise of its powers.

A classical situation is when, the state is directly involved in excessive secrecy and cover-ups, disinformation, and unaccountability which often reflect upper-class, royalty and nonpluralistic interests, and infringe human rights and the state laws. One of the key issues is the extent to which, if at all, state crime can be controlled. Often state crimes are revealed by an investigative news agency resulting in scandals but, even among first world democratic states, it is difficult to maintain genuinely independent control over the criminal enforcement mechanisms and few senior officers of the state are held personally accountable. When the citizens of second and third world countries which may be of a more authoritarian nature, seek to hold their leaders accountable, the problems become more acute. Public opinion, media attention, and public protests, whether violent or nonviolent, may all be criminalised as political crimes and suppressed, while critical international comments are of little real value.

In a state where there is dictatorship and reoccurence of State Crimes, it will result in fostering organized crime, corruption, and authoritarianism. In some third world countries, this political atmosphere has encouraged repression and the use of torture.

JUDGING THIS CASE AGAINST THE SHEIKHS:
THIS IS A CLASSIC EXAMPLE OF A STATE CRIME, WHERE THE STATE INSTITUITIONS BREAK THE RULE OF LAW TO SERVE THE ROYAL FAMILY MEMBERS

ACI Real Estate Dubai Niki Lauda Tower Project – Define Properties executive detained

source The National

DUBAI // A principal shareholder of Define Properties has been detained by Dubai authorities on provisional charges of fraud, prosecutors said today.

The arrest of the executive comes in the middle of negotiations with Alternative Capital Invest Real Estate (ACI), a Germany-based property developer operating in Dubai, to take over some of Define’s assets.

The major shareholder was arrested in mid-March after complaints were filed by an investor in Define Properties, said Tarek Daoud, the administration director of the company. He said the amount being sought by the investor was close to Dh30 million (US$8.1m).

“He is arrested and in Bur Dubai police station,” Mr Daoud said. A lawyer for the detained executive did not return messages today.

Robin Lohmann, the managing director of ACI, said the arrest would not disrupt his company’s negotiations with Define Properties.

“It is not affecting our deal,” Mr Lohmann said. “We are negotiating over a different part of the company that is unrelated to this case.”

Earlier this year, ACI took over the Niki Lauda Twin Towers in Business Bay from Define Properties after construction stalled and the future of the project appeared to be in jeopardy.

ACI had marketed and sold units in the building last year, but Define Properties was still responsible for building it.

The Case Dynasty Zarooni – Dubai Prosecutors Rejected Bail of Kabir Mulchandani

source WallStreetJournal 7starsdubai

Dubai prosecutors Sunday rejected a bail application from Dynasty Zarooni’s Chairman Kabir Mulchandani who is being held by police on 450 million U.A.E. dirhams ($123 million) fraud allegations, according to documents seen by Zawya Dow Jones.

Mulchandani, who couldn’t be contacted by Zawya Dow Jones, has previously denied any wrongdoing.

Ayman Merdas, a lawyer for Global Advocates & Legal Consultants representing Mulchandani declined to comment when called by Zawya Dow Jones Monday.

Mulchandani applied for bail on March 11 but was refused March 22, according to the Public Prosecution document seen by Zawya Dow Jones.

The Dubai public prosecutor handling the Dynasty Zarooni case couldn’t be reached Tuesday.

-By Stefania Bianchi, Dow Jones Newswires, +9714 364 4967 Stefania Bianchi@dowjones.com

more about this case from Archive 7StarsDubai

Al Fajer Properties Investors asking Maktoum Hasher” where is our money” – Headlines from Sweden told – Maktoum Hasher Maktoum buys into Saab

source Sweden Press

by google translated version

Chinese Geely need money to buy Saab.

Shekh Maktoum Hasher Maktoum al Maktoum. GT can today reveal the name of a very likely co: Sheikh Maktoum Hasher Maktoum al Maktoum

More from the archive Al Fajer Propertie

critical discussion about the Saab Deal

and Saabunited.com

Al Fajer Properties Dubai Court Case : Anyone can sue anyone, whether they are from the ruling family or not,’ Tamimi said.

source REUTERS March 11, 2009

Dubai court began a hearing against three members of the emirate’s ruling family after businessman sought $1.9 billion in compensation for the alleged seizure of his firm.

The claimant, Shahram Abdullah Zadeh, a Dubai-based Iranian businessman and property owner, filed the civil suit, alleging that his business had been taken over by Sheikh Hasher Maktoum Al Maktoum, according to case documents obtained by Reuters.

The court handling the case against Al Fajer Real Estate and members of the Dubai ruling family began the trial but adjourned to April 8 after defendants did not attend.

‘We attended the session but the defendant did not attend and the session was adjourned to April 8,’ Salem Al Shaali, Zadeh’s lawyer from Al Shaali & Co, told Reuters by telephone.

Sheikh Hasher had sponsored Zadeh in line with the United Arab Emirates law which requires foreigners to have a UAE national as a partner or sponsor to carry out business activities, the documents showed.

Sheikh Hasher declined to comment by telephone or respond through email. His son and daughter could not be reached by telephone.

The suit is likely to draw wide attention as a test case for Dubai, home to many Western banks and a regional business hub.

Dubai has fashioned itself as a tourist destination and business-friendly centre for many international firms, and captured global attention by building palm-shaped islands in the sea and the world’s tallest building.

Last year, as Dubai’s booming real estate market reached dizzying heights, the emirate launched a high-profile anti-corruption campaign that saw the arrest of several well-known business figures.

But the prolonged detention of several Dubai property executives as part of the probe has been criticised by groups such as Amnesty International.

Zadeh accuses Al Fajer company, Sheikh Hasher, his son and his daughter, of involvement in the case, according to case documents. The case names the daughter, Sheikha Meryam, as a partner of the firm, and the son, Sheikh Maktoum, as a manager.

Zadeh alleged that Sheikh Hasher and Sheikha Meryam have ’seized all the company has from cash monies, movables, properties, and others’ in March last year, according to case documentation.

The seizure of the company occurred while Zadeh was held in custody of Dubai police, according to Zadeh.

‘I was arrested for 60 days on February 21, 2008 and until this day I don’t know what law I have broken, and I have not been charged with anything. I still don’t know why they have kept my passport for over one year,’ Zadeh told Reuters.

The chief of Dubai police, major general Dahi Khalfan Tamim, confirmed the arrest to Reuters by telephone and said that Zadeh was held on charges of bribery on order of the public prosecutor, charges that Zadeh denies. The public prosecutor could not be reached for comment.

Abdullah Zadeh’s lawyer, Salem Al Shaali, said he expected the case to be decided on its merits.

‘We haven’t yet seen anyone, whether from the ruling family or other, escaping the rule of law,’ he told Reuters.

Essam Al Tamimi, lawyer at Al Tamimi & Co. told Reuters by telephone that the judicial system in the UAE ‘is very independent from the government and the ruling family’.

‘Anyone can sue anyone, whether they are from the ruling family or not,’ Tamimi said.

Archive Al Fajer

Al Fajer Properties Case opened on Wednesday – lawsuit also targets Sheikh Hasher Maktoum`s daughter as a partner of the firm and the son, Sheikh Maktoum Hasher Maktoum Juma Maktoum

DUBAI, Mar 11, 2009 source Zawya

An Iranian businessman ( Shahram Abdulla Zadeh )  is suing members of Dubai’s ruling family for close to two billion dollars over real estate investments, in a case which opened on Wednesday.

Shahram Abdullah Zadeh, former CEO of Al-Fajer Properties
who was fired in 2008, has filed the lawsuit against the firm and its owner Sheikh Hasher Maktoum bin Jumaa al-Maktoum, a brother-in-law of the emirate’s ruler, Sheikh Mohammed bin Rashid al-Maktoum.

The lawsuit also targets Sheikh Hasher’s daughter as a partner of the firm and a son, Sheikh Maktoum, who has since been appointed president of Al-Fajer, according to legal documents obtained by AFP.

The case demands the “recovery of all material assets of Al-Fajer Properties
which gave no immediate reaction to the opening of the case.

Zadeh insists he was the real owner of the company and the only investor.

He had used Sheikh Hasher’s name to obtain the firm’s licence, as foreigners are not allowed to register real estate companies under their own name in the United Arab Emirates.

“I was the sole investor. Al-Fajer Properties
is my company. Sheikh Hasher’s only contribution has been the real estate licence as a sponsor,” he told AFP.

Zadeh is demanding seven billion dirhams (1.9 billion dollars), which “includes the plaintiff’s investments and the return on them,” his lawyer Salem al-Shaali said.

“We have enough documents to prove he was the sole investor,” he added.

Only a representative of the plaintiff’s lawyer was in the Dubai court of first instance for the hearing, which lasted a few minutes. The court’s list named Al-Fajer as the defendant, with no mention of the Maktoums.

The judge referred to them by numbers before the hearing was adjourned to April 8.

Zadeh has said he was detained by Dubai police without charge for 60 days last year, at the same time as he was dismissed, and that his passport was confiscated for a year, without an explanation.

The civil case comes as several executives from high-profile Dubai firms are held on suspicion of embezzlement and as the once booming regional business and tourism hub struggles to stave off the impact of the global economic slowdown.

ak/hc

Comment of the Week – to Al Fajer Properties Dubai

I am not a lawyer, but as a real estate investor I am familiar with the real estate license being registered in the name of a local because the laws do not permit a non UAE national to be the owner of a real estate company. Every single real estate company I know has done the same thing.

The big question is,

IF ZADEH IS SAYING IT SO OPENLY IN THE PUBLIC MEDIA THAT SHEIKH HASHER MAKTOUM HAS NOT INVESTED A SINGLE DIRHAM INTO AL FAJER PROPERTIES, WHY IS SHEIKH HASHER MAKTOUM NOT REPLYING? IF ZADEH IS NOT TELLING THE TRUTH SURELY THE SHEIKH SHOULD BE COMING FORWARD WITH A STRONG STATEMENT AND PROOF OF FUNDS HE HAS PAID INTO AL FAJER PROPERTIES!!!

BY KEEPING QUIET SHEIKH HASHER MAKTOUM AND AL FAJER PROPERTIES ARE CONFIRMING WHAT ZADEH IS SAYING THAT THE COMPANY BELONGS TO HIM AND SHEIKH HASHER MAKTOUM HAS NOT INVESTED A SINGLE DIRHAM INTO THE COMPANY!!!!!!!!!!!

I don’t know any of the parties involved. I fail to understand why they have taken over Al fajer Properties when zadeh was detained without any charges for 2 months???? wHY THE AUTHORITIES ARE NOT REPLYING ABOUT THE 2 MONTHS JAIL WITHOUT CHARGES??This is going to damage dubai’s reputation and will hurt the rest of the real estate market because at the end, dubai will be regarded as a city that investors do not have the basic security. So what is the difference between Dubai and Zimbabwe? Mugabe did the same to my parents’ farms.

Very sad, because it affects all our businesses.

Dear John, I am sure sheikh hasher maktoum is an honorable man in your eyes but sheikh hasher and zadeh have to be treated equally under the law or we have to accept Dubai is Zimbabwe

read more about ….. Al Fajer Properties

read more comments to….

Al Fajer Properties – Comment of the day

I started with Al Fajer Properties from day 1 under Dr. Shahram and saw how he invested his money, dedicated his time 24/7 and created a brand out of Al Fajer. Sheikh Hasher Maktoum is an old fashioned 65 year old who loves gossip and whispers.

All the Al Fajer staff witnessed how Dr. Shahram fought with Al Ahmadiah (sheikh hasher’s contracting company that was building the towers for al fajer), because Al Ahmadiah was not doing anything on site. That was damaging Al fajer Properties name and Dr. Shahram felt responsible towards the investors and thats what triggered sheikh hasher maktoum’s aggressive behaviour towards Dr shahram.

The son, Sheikh Maktoum Hasher Al maktoum, was a nobody. Even Sheikh Hasher always told us not to let him in the office! I remember sheikh maktoum hasher used to call Dr. Shahram’s secretary or the receptionist and request to book the meeting room to bring his friends and show off!!!

When Dr Shahram disappeared, we were told by sheikh maktoum hasher that the state security has taken him and he is never coming back!!! That was the begining of a series of illegal activity by sheikh maktoum hasher in the company, including changing documents, illegal sales of properties, threatening many staff members with state security arrests,…etc

Everyone in Al Fajer knows that Dr. Shahram was & is the owner of Al Fajer Properties. Sheikh maktoum hasher always uses his “uncles” name Sheikh Mohammed Bin rashid, the dubai ruler to threaten people.

The rest of the world is not stupid, somebody is locked up for 60 days, tortured, passport confiscated for a year, no charges against him, his business has been stolen by the brother in law of dubai ruler, the case he filed at the public prosecution is closed without an explanation.

Is this the fair, just society that sheikh mohammed bin rashid has envisioned in his Dubai Strategy? So the government is actively helping criminals? Why nobody dares to talk?

Al Fajer Employee
22. February 2009

Former UAE Minister of State Al Falasi gets two years in jail for fraud

original published xpress Dubai
http://www.xpress4me.com/news/uae/dubai/20012058.html

Former UAE minister of state Khalifa Mohammad Bakhit Al Falasi was on Wednesday sentenced to two years in jail by the Dubai Misdemeanours Courts after being found guilty of fraud and embezzlement.

The charges related to swindling a Lebanese woman of her family’s Dubai-based business, an undisclosed amount of money, believed to be millions of dirhams, and a large property.

Two other defendants – American businessman Salim Helmy Abdullah and Indian businessman Bilal Madhom Raman – were also jailed for two years.

The former minister’s son, Mohammed Khalifa Al Falasi, was acquitted on all charges.

In an exception to its usual policy, an official statement from Dubai Courts named all the defendants.

Presiding Judge Hamad Abdul Latif also initiated an action for a civil suit which is to be filed on behalf of the victim against the three defendants.

The charges, brought by Lebanese businesswoman Maysoon Fahmy Jamal, led to the former minister’s dismissal by a presidential decree last July, just five months after his appointment.

Ms Jamal, according to Dubai Public Prosecution, was involved in business dealings with Al Falasi since 1995.

In her deposition to prosecutors, she said her late brother Hassan Fahmy Jamal was the owner of an IT company which developed computer security technology.

Khalifa Mohammad Bakhit Al Falasi was, for a fee, the company’s sponsor.

She said that between May 2005 and May 2008, Al Falasi and the two other defendants who were employed under him swindled her by tricking her into signing a release form in order for the former minister and his partners to take over the company.

She stated that the group falsely informed her that the former minister was a part-owner in the company and approached her with business offerings that could boost her other businesses.

The minister, his son, and their co-defendants earlier denied all charges. Those found guilty are expected to file an appeal immediately.

Default by a major Dubai-owned company would trigger a crisis of confidence that could cost the emirate its status as the preeminent center for business in the region

http://www.zawya.com/story.cfm/sidZW20090216000068/lok095203090216?weeklynewsletter&zawyaemailmarketing

Will oil-rich Abu Dhabi bail out neighbor Dubai, currently groaning under $70 billion of debt racked up by its government-owned companies? Don’t count on it. Abu Dhabi’s decision last week to pump $4.4 billion into its own banks while offering no support to lenders in Dubai or other emirates in the Gulf federation may simply be brinkmanship amongst the sheikhs. But the possibility Abu Dhabi will refuse to come to Dubai’s aid – once seen as almost unthinkable – can no longer be ruled out.

That raises the prospect of a deeper debt crisis in Dubai. And even a fragmentation of the 37 year-old federation if Abu Dhabi refuses to pump billions of dollars into the economies of poorer emirates like Dubai to prevent either a corporate default or severe downturn. The cost of insuring Dubai debt has rocketed to around 1000 basis points for five-year debt – higher even than Iceland.

Dubai’s economy is contracting sharply after a 40% slump in property prices, leaving the emirate struggling to refinance $15 billion of debts this year, according to credit rating agency Moody’s. Without Abu Dhabi’s help, it has little chance of doing so. Moody’s says it is likely to downgrade a raft of state-owned companies “if a trend of selective treatment within the federation becomes discernible.” And bankers say they won’t extend new lines of credit to Dubai without cast iron financial guarantees from Abu Dhabi.

Abu Dhabi is driving a hard bargain. Its demands are thought to include the surrender of Dubai’s autonomy and the loss of control over crown jewels such as Emirates Airline and Nakheel, builder of the emirate’s Palm-shaped islands. That may be too much for Dubai’s ruling Maktoum family to stomach – partly because the rulers of the two sheikhdoms are cousins. But also, because Dubai contends it was a principle of the 1971 agreement to form the federation that Abu Dhabi would use its oil wealth to support the other emirates.

Abu Dhabi has its own economic worries, thanks to falling oil prices, which account for the majority of the emirate’s export earnings. Plus, its reserves have been depleted by the huge losses suffered on its foreign investments, such as the $7.5 billion Abu Dhabi pumped into Citibank in 2007 just before its shares collapsed.

But neither Abu Dhabi nor Dubai can afford to allow this standoff to drag on. Default by a major Dubai-owned company would trigger a crisis of confidence that could cost the emirate its status as the preeminent center for business in the region. Worse, it could pull on the very fabric that binds the emirates together, destabilizing the entire region.

-Andrew Critchlow is Middle East managing editor of Dow Jones Newswires. He can be contacted on +9714 364 4960 and at andrew.critchlow@dowjones.com.

TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackEurope@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.

(END) Dow Jones Newswires

16-02-09 0952GMT

Dynasty Zarooni Fraud Dubai – Some statements from Investors

 http://www.dnaindia.com/report.asp?newsid=1221052

Kabir Mulchandani, who was arrested in Dubai in connection with an alleged realty scam, is also alleged to have floated another scheme of three 40-floor buildings( Jumeirah Business Centre 7, 8,9 )  in Jumeirah opposite the Dubai Marina — the most posh locality of the Emirates.

Full page advertisements were run in papers, making him the largest advertiser of the Emirates during the period, said Mohammed Marzooq from Kerala. “He showed us the picture of a building with a podium, three-storeyed car parking and a complete floor for a departmental store. It was half complete and the rest of the 35 floors were to be built in the next one year”, Marzooq said.

Atul Patel, a UK-born Indian , a multinational from US, told DNA over the phone that he had “booked a 10,000 sq ft flat in the 35-floor building called Ebony Ivory at Jumeirah for 3.5 million dirhams.”

“I paid the entire amount because I was dealing with the company for some other work. During a vacation in Europe recently, I happened to meet someone who was unhappy with the project. On my return, I went to the site and found that I too had been duped royally,” Atul said.

When cornered by 12 investors, Marzooq said Mulchandani flew them to Nice (in France) in his jet and treated them to a cruise vacation. He showed them properties in Nice. Claiming them to be his own, he asked them to invest there for speedy returns.

“He convinced all of us to sign a cheque, promising that it wouldn’t be encashed till their return to Dubai. Upon arriving at Dubai we found that the cheque had already been encashed,” Marzooq said.

A complainant told DNA that Mulchandani threatened him with deportation due to his clout in the UAE.

News from Dynasty Zarooni and Al Fajer Properties – I’m the victim’, says property tycoon

http://www.thenational.ae/article/20090211/BUSINESS/886702850/1051

Last Updated: February 11. 2009 10:28PM UAE / February 11. 2009 6:28PM GMT

Kabir Mulchandani, an Indian property tycoon detained by police in Dubai, says people who are accusing him of fraud are trying to get out of investments that turned sour because of the property downturn.

The chairman of Dynasty Zarooni is being held because more than 25 investors, with claims worth Dh280 million (US$76.2m), have accused him of fraudulently selling them property and running an illegal investment scheme, a lawyer for the investors said. Mr Mulchandani, 36, denies the accusations and says he is being targeted by a group of investors who are unable to meet their obligations as the property market deteriorates.

“I am the victim here,” he said. “After Lehman Brothers went bust the world changed… The system is being misused by certain individuals who are just wanting money and wanting to get out of commitments they have made that they are not able to fulfil because the market has turned.”

Mr Mulchandani said his case was likely to be a predecessor to a rash of similar cases caused by the decline in the property market. Dubai property prices have fallen by about 25 per cent since hitting a peak last year.

“It is going to turn into a bloodbath of attacks by investors who just want to get out of obligations,” he said. “Do you think I would be sitting here had the market been OK?”

Dynasty Zarooni, a joint venture between Mr Mulchandani and Hilal al Zarooni, an Emirati businessman, is one of the highest profile property companies to come under scrutiny by the authorities since the property market began to fall late last year. The company was the top newspaper advertising buyer in the Emirates last year, spending $14.6m and topping the likes of Nakheel and Emaar Properties, according to figures from the Pan Arab Research Centre. Its advertising spending ranked 10th across the Middle East.

The company, founded in 2005, is a property resale and marketing operation. It has bought entire buildings off-plan from developers with a bulk discount and re-sold floors and units to investors at a premium. Then, as a service to these core investors, it would market the buildings prominently around the country to facilitate their resale to retail buyers. Usually, Dynasty Zarooni would play a middleman role for the first payments and then contracts would be issued between the buyer and the developer, cutting the company out of the deal.

It sold 29 buildings in this way last year, according to executives. The business was profitable, with Mr Mulchandani planning a foray into New York City property before his arrest.

He lives in the Emirates Hills development in Dubai.

A group of investors, however, allege Mr Mulchandani built his company by misleading investors, according to Salem al Shaali, a lawyer representing several investors.

One of the allegations is that Dynasty Zarooni displayed one building and sold another.Investors said they were shown buildings that were several storeys high, and told that they were the Ebony and Ivory towers. They bought dozens of units, and in some cases several floors, of the buildings. The buildings were also misrepresented in advertising, the investors say.

One advertisement in a daily newspaper on July 23 last year showed 24 photographs of “round the work” progress on the Ebony and Ivory projects. A caption for the photographs reads: “Shot at location on 10th June 2008. Ebony & Ivory – Jumeirah Lakes Towers.”

 In fact, the images showed other buildings in the Jumeirah Business Centre complex that were further advanced in construction.

Work on the Ebony and Ivory towers plots still has advanced only to shoring and piling. A contractor has yet to be chosen for the Dh2 billion project.

The Picture shows the construction Status of today 2009, Ivory Tower ( or named Juemirah Business Centre 9, Developer Al Fajer Properties, Jumeirah Lake Towers Dubai)

Al Fajer Properties, the developer of Ebony and Ivory towers, said a construction contract would soon be signed for the towers, which it said were to be finished between next year and 2012.    An Al Fajer spokesman declined to comment on the issue.

Mr Mulchandani said the advertisements were meant to show the larger Jumeirah Business Centre complex and depict Al Fajer as a hard-working developer.

“I don’t believe it is misrepresentative in any way,” he said.

He said the company had sold the entire building in April and that the investors involved in claims against him had signed contracts that detailed which plot of land the buildings were to be built on.

Claims have emerged involving other projects that were bought and resold by Dynasty Zarooni, including the Sheffield Classique and Al Qoraishi Tower, according to Mr al Shaali.

Imran Karim, the son of an investor taking action against Mr Mulchandani, said his father, Abid Karim, was sold units in the Classique and Al Qoraishi Tower under the impression that Dynasty Zarooni was the developer.

Mr Mulchandani said he never represented himself as a developer.

Officials from Sheffield Real Estate and Baiti Properties Development, the developer behind the Al Qoraishi Tower, declined to comment.

Another allegation against Mr Mulchandani is that he created an illegal “investment club” where 12 investors were invited to pay Dh300,000 a month for 12 months for a guaranteed return of up to Dh1m a month. After six months, they expected to redeem their investments, but Mr Mulchandani did not pay, investors said.

One such investor, Mohammed Arif, who also invested with Dynasty Zarooni in several properties, said he had Dh25m with Mr Mulchandani and projects sold by Mr Mulchandani.

“I invested a lot of money with him,” he said. “I fear the money is gone.”

Mr Mulchandani said the Dh300,000 was actually a membership fee for 12 investors who bought from him in bulk. The fee would give the members the first right of refusal to buy up to 5 per cent of buildings that Dynasty Zarooni acquired, as well as use of the Dynasty Zarooni offices for resales. The fee also contributed to advertising, he added.

Marwan bin Ghalita, the chief executive of the Real Estate Regulatory Authority (RERA), declined to comment on the accusations against Dynasty Zarooni. In November, RERA stated that there were no complaints against Dynasty Zarooni, after allegations in two Indian publications that the company had sold projects while representing to investors that they were buying another project.

Officials from the Dubai Public Prosecution declined to give details on the cases, but confirmed staff members were investigating the claims.

An Example of : The differenence between PR and Reality – 5 Towers Jumeirah Business Centres will be delivered in September 2009 ?????

Jumeirah Business Centre 1 , Developer Al Fajer Properties  was launched Dezember 2005. Sold within a few weeks after the launch, said by the company. The completion of this Office Tower was announced first for end 2007 , after this end 2008 and now end….. of year ……… ???

The History between PR and Reality show this pictures:

Happy going ? …. 2006  

 

 

 

 

 

 

 

Construction Status of Jumeirah Business Centre 1,launched in December 2005,  Plot G2, Jumeirah Lake Towers, Al Fajer Properties 

 

 

Jumeirah Business Centre  1 by Al Fajer Properties Construction Status in May 2007

 

 

 

Panorama of February 2009 shows that the Towers around Jumeirah Business  Centre 1( those Towers around also launched in 2005) are still ready.

The completion of the Jumeirah Business Centre 1, the first ever launched Tower of Al Fajer Properties is…………. ??????????

Latest interview , February 2009,with the project Manager , construction company, for Al Fajer Properties:

o3. Feb. 2009 7days.ae  

 http://www.7days.ae/storydetails.php?id=73328%20%20%20%20&page=local%20news&title=Riding%20out

………“[The atmosphere in construction] is a bit depressed, but I think Dubai and the UAE in general is much better off in general than the rest of the world,” said Andre van Schalkwyk of Al Ahmadiah Contracting and Trading (AAC), who is site manager of Al Fajer Properties’ Jumeirah Business Centre.

He added however, that his workers are more confident of their position, as he believes AAC will outlive the downturn.

“The workers are not anxious, AAC has a very stable working environment and we tend not to over extend ourselves, which makes it much easier to get through downturns, particularly of this magnitude. I think we’re a lot better off than a lot of other companies,” he said.
Van Schalkwyk has been working in construction in Dubai for six years and has always found it challenging.
“[Challenges] are very simple – usually time and Dubai has a knack for changing things very suddenly!”
“It’s the changing environment that is your biggest challenge in the whole construction industry,” he said.

His current development with Al Fajer Properties is the largest he has been involved with since coming to Dubai, although he has been part of big projects such as Ibn Battuta Mall.
Jumeirah Business Centre is a group of five high-rise office buildings in the Jumeirah Lakes Towers development, which are scheduled to be delivered this September.

“The biggest challenge [with this project] is having to do five towers running exactly on the same timeframe, while not being located on the same plot. They’re in the same area but not on the same plot, that is a serious challenge, because projects are usually phased,” van Schalkwyk said.
Back when the centre got started, he also had to deal with the cement shortage, which he said affected them “quite seriously”.However, he is “fairly confident” of reaching the September deadline for the new development.
“After His Highness Sheikh Maktoum bin Hasher Al Maktoum came on board, it changed the whole management structure of the Al Fajer Group and we’re now managing to accelerate the project quite dramatically. We’re actually doing very well – we’re running slabs at around six, sometimes five, working days cycles,” he said.
When Sheikh Maktoum became president of Al Fajer Properties (AFP) in March last year, workers were working days and knocking off at night, but now construction takes place round the clock with the workers doing shiftwork in order to meet the delivery date.

In fact, a lot of changes have taken place at AFP so that it can streamline its business and meet its obligations.
Joseph Paul, finance manager at AFP, told 7DAYS that a “planning and financial restructuring” had taken place last March, which resulted in the entire land bank of the company being disposed of by the middle of last year.
“[This] has turned out to be an excellent decision, keeping in view the current drastic devaluation of land,” he said.
“Because of apt and timely decisions, AFP is still in a robust position to operate with zero debt, even in this worst scenario of world economic recession.”

Van Schalkwyk also sees the upside of downturn, particularly for real estate and construction.
“I think there will be a lot more stability and sense in the market. My personal belief is that the downturn at the moment is a bit of a blessing in disguise – it will stabilise the market and I believe we will get a much more healthy growth afterwards,” he said.

And despite the myriad announcements of job cuts in the sector, he feels construction won’t stay down for long.
“I think in the next two to three years, the workforce will shrink overall – but then it will grow again,” he said.

Dubai Fraud alligations – The Case Dynasty Zarooni: Complaint at Dubai Police now also against Al Fajer Properties

original published Financial Times

http://www.ft.com/cms/s/0/2af58370-e013-11dd-9ee9-000077b07658.html?nclick_check=1

 

Dubai Police are investigating fraud allegations against the chairman of one of Dubai’s largest private real estate companies as dozens of aggrieved investors claim he defrauded them of more than $100m.

Kabir Mulchandani, the chairman of Dynasty Zarooni, was arrested last week on allegations of fraud and is helping with inquiries, police officers told the Financial Times.

At least 10 members of Dynasty Zarooni’s ”investment club”, which last year promised vast profits from the company’s preferential access to real estate deals, have lodged complaints against Mr Mulchandani, an Indian national, his Emirati business partner, Hilal Al Zarooni, their joint venture Dynasty Zarooni, and two other employees.

Investors say that Mr Mulchandani in March received subscription fees of Dh300,000 a month from 12 members. He promised them returns of Dh1m a month after six months, or Dh6m, in September, they say.

One British loser says he was encouraged by initial profits made by another club member, who had reinvested the proceeds into the scheme rather than taking the cash.

The fraud allegations weigh further on Dubai’s financial hangover as its six-year property boom fizzles out, with investor confidence hitting rock bottom as people are marooned in an illiquid, declining market while developers are hamstrung by financing difficulties.

More than 25 executives have been detained in an anti-corruption investigation at state-linked property companies. None have gone to trial yet, but the arrests have had an impact on investor confidence in Dubai.

News of the complaints against the chairman could raise concerns among other investors in Dynasty Zarooni’s claimed Dh21bn real estate portfolio.

Mr Zarooni denied any participation in, or knowledge of, a fraudulent scheme. ”One hundred per cent I deny this, there is nothing illegal whatsoever,” he said.

Mr Mulchandani, who has been detained but is seeking bail, could not be reached for comment. He denied any wrongdoing in a local press interview last week.

Lawyers say more than 100 other investors are preparing cases against Dynasty Zarooni over misrepresentation during the sale of its real estate projects.

One aggrieved investor, who in May placed a 20 per cent deposit on an apartment in Ebony Tower 1, opposite the Dubai Marina, for Dh650,000, yesterday lodged a complaint with the police against Dynasty Zarooni and their development partners, Al Fajer Properties, for allegedly misleading him about the progress made on the building’s construction, thereby raising the supposed value of the property. ”I have been cheated and am very distressed,” he said.

The cases, if they go to trial, could seek the recovery of hundreds of millions of UAE dirhams, said Salem Shaali, managing partner at Al Shaali & Co, which is representing the victims of the alleged fraud.

This could develop into one of the UAE’s largest fraud cases if other individual investors in Dynasty Zarooni come forward, he said.

Copyright The Financial Times Limited 2009

Ebony 1 Tower is a project by Al Fajer Properties within the Master Development Jumeirah Lake Towers. Ebony 1 Tower is also known under the name Jumeirah Business Centre 8 or Jumeirah Business Centre 9 ( Ivory Tower ), Developer Al Fajer Properties Jumeirah Lake Towers. All in the Master Development Jumeirah Lake Towers named Towers , Jumeirah Business Centre, total 9 Towers, are projects by Al Fajer Properties.  The Project has been launched and sold since December 2005 by Al Fajer Properties. Today 2009, no Tower of total 9 Towers is completed,only a part of them under construction,  the completion of this towers ( Phase 1 = 5 Towers) was promoted by Al Fajer Properties for December 2008.

Latest status of Plot G3 / named Jumeirah Business Centre 9 by Al Fajer Properties  or  also named Ivory Tower

http://www.skyscrapercity.com/showthread.php?s=5a50ee4f54171eaf6c2722678b8379c8&t=290912&page=18

 

 

From Google Video search

http://video.google.de/videoplay?docid=4416649692877507769&ei=l_9xSa2OGKXy2wKJ5cG0BQ&q=dynasty+zarooni

Prosecution looks into Dynasty Zarooni Dubai fraud claims

original published 7days 13. Jnauar 2009

http://www.7days.ae/storydetails.php?id=72375%20%20%20%20&page=local%20news&title=Prosecution%20looks%20into%20fraud

The alleged fraud case against the chairman of Dynasty Zarooni, is now under investigation by Dubai Public Prosecution, a spokesperson at the office confirmed.

A lawyer for the comp-lainants told 7DAYS that the investigation had begun with questions for the investors, who claim that the chairman, Kabir Mulchandani, defrauded them of up to dhs450 million ($123 million).

Salem Al Shaali added that he could not tell the number of investors in the case as there are “new complaints every day”.

Al Shaali also said there was a second suspect in the case, and that some investors had informed him that this suspect had already fled the country.

The law firm, Al Shaali and Company, also told newswire Zawya Dow Jones that Mulchandani is being questioned on two counts, both subject to the Federal Penal Code and Dubai’s property laws.
The first case relates to the allegations that the membership club Mulchandani has admitted to running was sold to a small group of wealthy investors under false pretences, and that they were promised large returns.

The second case involves the selling of property at the dhs2 billion Ebony and Ivory development in Dubai’s Jumeirah Lake Towers district.
According to Zawya Dow Jones, Al Shaali said that Mulchandani took deposits for 20 per cent of the property but failed to deliver the project.

Dubai Public Prosecution confirmed they had started the investigation.

Dynasty Zarooni said it preferred not to comment until charges had been brought.

Dynasty Zarooni Chairman – Criminal Business Partner of Al Fajer Properties Dubai – arrested

http://www.bi-me.com/main.php?id=29498&t=1&c=33&cg=4&mset=

UAE. The head of a Dubai-based real estate firm has denied reports that he had been arrested on allegations of fraud.

Kabir Mulchandani, Chairman of property investment consultant Dynasty Zarooni, said in an interview for Gulf News there was no police arrest warrant against him.

“I know some complaints have been lodged with the police by some people against our firm but these people gave cheques that bounced. They have no legitimate reason to complain,” he explained over the phone.

He said the company was “in good shape.”

Company President Hilal Al Zarouni said the company is “functioning properly”. Both executives said they didn’t know if the police were investigating the complaints.

Lawyer Salim Al Sha’ali, who represents a number of complainants, said the complaints are related to an alleged fraud scheme.

“We have been studying the legalities of the case… and we believe that there is a supposed crime of conning people out of money,” he said.

The Federal Penal Code and the property laws issued lately are the legal grounds in this case, argued the lawyer. Sources said the complaints involve some 30 investors with at least US$1 million each invested with Dynasty Zarooni.

However, Mulchandani denied the accusations and said he has “all the documents that support our position that those people have reneged on their commitments”.

Reports yesterday claimed clients said they paid AED 300,000 per month for which Mulchandani promised a return of AED 1 million a month after the first six installments. But Kabir Mulchandani said that the montly payment was a fee for investors to secure first refusal on properties sold by Dynasty Zarooni at pre-launch prices, an average discount of between 2% and 5%. And he insists no returns were ever guaranteed.

“There is not a single document, email, a fax, an SMS, that anybody can produce in Dubai or elsewhere in the world that in any way represents that we guaranteed any form of return,” he said.

He added that many investors had actually made far more than the guaranteed return he is claimed to have given, despite the slump in the property market.

He said: “This is a case of people having a situation where they can’t meet their obligations, which is unfortunate, but they shouldn’t have over-traded. You can’t buy what you can’t pay for.”

He said those making the complaints against him had bounced post-dated cheques given to the company for both the membership fee and for the properties they purchased.

Mulchandani had left India for Dubai where he set up Dynasty Zarouni, to cash in on Dubai’s booming real estate market.

Kabir Mulchandani is also the founder of Baron International, the Mumbai company that pioneered cheap colour TVs and music systems under the brand names Aiwa and Akai, a firm which came under scrutiny from the DRI and Enforcement Directorate in India.

Dynasty Zarooni markets ready-to-move in properties constructed by Dubai real estate company Al Fajer. The firm advertises these properties on his website and invites NRIs to invest money.

Al Fajer is known for its projects in Jumeirah Business Centre 1 and 2 apart from various projects at Jumeirah Lakes and Jumeirah Island.

Dubai’s Real Estate Regulatory Authority (RERA) is probing the company’s operations after nearly 30 NRIs from India, Russia and UK complained online that he had misled them by showing a different property and selling them another

RERA authorities are reported to have told Indian newspapers that the firm had also not followed the local rule of depositing sale proceeds of real estate properties into a government-shared escrow account.

One particular complaint cites how Mulchandani allegedly sold apartments in a three-tower complex, showing the two completed towers as the properties that were for sale but allotting ownership documents of the third tower which has yet to come up.

Speaking to Mumbai Mirror RERA’s head of legal cell, Imad Hussein, is reported as saying: ”We have received complaints of 30 investors from India, Russia and the UK. The company Dynasty Zarouni offered real estate properties at half the market price.

“It also allegedly lured investors by misrepresenting a different property in the name of another. Each buyer has invested at least US$1 million with the firm.”

According to Hussein: “We have invited all investors with similar complaints through advertisements in local newspapers to come forward, and have assured them that RERA will play an active role in safeguarding their money under law number 8 in line with the directives of Dubai’s ruler Sheikh Mohammed.”

Palm Invest hired expensive prostitutes – Malika K. seen with top of Palm Invest

original published: Netherlands DeTelegraph December 2008

http://www.telegraaf.nl/binnenland/2769684/__Palm_Invest_huurde_hoeren__.html

 

11-12-2008:

Palm Invest hired expensive prostitutes
Malika K. seen with top of Palm Invest

Palm Invest in Contract Whores

AMSTERDAM – The prostitutes in command of Palm Invest real estate fund clients in the oil state in Dubai entertained, have detailed statements before investigators of the investigation Ultra Scan.

Ultra-Scan is in command of some injured investors investigation into the money flows behind the fraudulent investment fund.

“One of the ladies in May 2007 for the men behind a Palm Invest Victoria Secret lingerie store in New York bought empty”
“This lingerie ended up in an apartment in Dubai to provide customers with a bit of Palm Invest in style too.” When Palm Invest running at full speed, investors were invited by the fund the palm islands in the oil state visit, where lucrative real estate projects would rise.

All prostitutes for Palm Invest in Dubai were active, according to the Englishman Moroccan nationality.
One of them told that she has received 40,000 euros to keep her mouth. The ladies were in Dubai maintained by men who were in contact with the men behind Palm Invest. There is much more behind than so far revealed.

Ultra Scan previously brought out that investors are also strongly put with photographs showing them to see with the prostitutes.
These photographs were secretly been made to them later under pressure to continue after they deposited their money went back requirements. The police investigation into this alleged blackmail yielded no hardcore evidence.
The main defendants deny emphatically that clients would have been squeezed with sex photos.

http://www.telegraaf.nl/binnenland/2769684/__Palm_Invest_huurde_hoeren__.html

Interpol – Money laundry – Malika worked for Define Properties in Dubai – ACI – Niki Lauda Towers

original published:http://www.revu.nl/12499.Ex-spionne%20Malika%20K.%20staat%20op%20straat

original translated by google: http://translate.google.com/translate?sourceid=navclient&hl=en&u=http%3a%2f%2fwww%2erevu%2enl%2f12499%2eEx%2dspionne%2520Malika%2520K%2e%2520staat%2520op%2520straat Malika K., the Moroccan ‘Mata Hari’ from Slotervaart, is dismissed by her company Define Properties in Dubai. It says the director of the company Tarek Kandil in an e-mail. Last week showed that he still Kandil, Malika had suspended “pending the investigation into the allegations” which in his opinion firm were unfounded. . Under pressure from intelligence Kandil has drawn a different conclusion, the work is finally dissolved Monday. Malika’s lawyer mr CMJ Zillikens confirmed yesterday morning in each case the suspension against Revu. According Zillikens the suspension is the result of a “defamation campaign from the Netherlands.” ” “We see what the consequences are,” says Zillikens, it aimed at the continuing online publications of former police officer and private detective Jacques Smits, who was hired by her ex in an attempt to control their son back. Kandil has threatened with legal action if he does not stop with publications about the company. Zillikens together with criminal lawyer Han Jahae last week spoorslags traveled to Dubai. What it wants is discussed Zillikens not say, except that it is a “good trip” and there was more news will soon follow. Malika worked until March of this year by property developer Omniyat Properties. Since she was fired when the company informed brought her back. Smits knew that include telling customers to Omniyat Malika by referring to

Tarek Kandil, an Egyptian who has just started Define Properties.

Kandil had worked for Omniyat, but was fired for unclear reason, as sources tell Revu. Tarek Kandil then dove at Schon Properties, responsible for projects such as Dubai Lagoon and Schon Business Park. The company became discredited because of the various construction projects but did not want rafts and investors suspected that they were taken by the nose. Tarek Kandil to Define Schon left to be examined.

Define Malika has for almost all funds governed by an Egyptian dealer who they already knew, sources tell Revu. Her resignation means to Define also possible that her visa will be revoked and they will have to leave Dubai. In May, the full bench that her 8-year-old son back to the father in the Netherlands, but Malika opposes the extradition of the child. Whether there is a relationship with the custody dispute is not clear, but her ex-husband Mohammed B., owner of an Amsterdam reiswinkel was last Friday when he robbed money and passports of over four hundred customers to airline Royal Jordanian would bring. The robbers have the vault with all the money and a few hundred passports taken. The location of the incident is a massacre, according to eyewitnesses. The two predators would firmly establish the name of Malika have said. The shop was closed Monday. “This is the end of his shop,” says a friend who for years assisted Mohammed state. “We were all scared for a long time that this would happen.” Mohammed B. has many times against Malika declaration made threats and violence, but her lawyers say that the stories B. sucks his thumb to prevent Malika her child in Dubai may hold. Jan Libbenga Jan Libbenga Malika werkte voor inlichtingen én criminelen Malika worked for intelligence and criminals Malika K. Malika K. duikt op in Dubai shows up in Dubai Malika naar Dubai door wangedrag ex-man Malika to Dubai misconduct by ex-husband Wordt Malika K. Is Malika K. uitgeleverd? extradited? this is an google translation from the original report:

Malika K., the Moroccan 
'Mata Hari'  from Slotervaart 
 who as a former spionne 
would have earned millions 
 with the laundering of 
dirty  money, 
is reported in Dubai.  
Sources told Revue this weekend that she has an apartment at the Dubai Marina.

She also has a new job. About her residence were several stories in recent weeks the round. So that they heard Revue in June with a false passport would have landed in France and from there to the Netherlands would be brought, but at different addresses in the Netherlands where they could stay observation teams have found nothing. Since Dubai has no extradition treaty with the Netherlands, authorities can no way. Cees Korvinus lawyer, who for many years the interests of Malika’s ex-husband represents in a custody case, early this year has already called for justice for extradition and that following the publication in Revue last week again done. At the time that there was contact with head Interpol in Dubai to take action, the judiciary refused to provide further details. . The prosecutor wrote that they do not know what the situation is. The publications on Malika in Revue, Telegraph and other newspapers have many disconnected.

Define Properties. Sources refused

Revue not only to her home address

but also on the new job of Malika

This brand new property 
developer,Define Properties  
 in Number One Tower on 
Sheikh Zayed Road in Dubai 
is largely run by former 
managers  of Omniyat, 
the company 
Malika was dismissed 
on March 16.

Director is Tarek Kandil, formerly sales manager at Omniyat.

The name of Malika is nowhere to be found on the website of the company, but it is to see the photo of the press in early June.

The company says now have a working capital of 500 million Dirham, and would have bought land sales worth 1.7 billion Dirham. . The main project is the construction of the Nikki Lauda Twin Towers, which should be completed in 2010. . Director Kandil promised opposite business magazine Business Emirates’ Define that no building plans launches as they do not actually completed, it aimed at the many fraud cases so slowly that Dubai is a very bad name have worried. Supervisor Real Estate Regulatory Agency (Rera) currently doing research on mala fide developers who buy contracts sell many occasions, with no other purpose than to fat profits to gather. . Some of these developers are even funded with money arms from Egypt. Middlemen purchase contracts let criminals’ pre launch ‘on the basis of the beautiful building plans and models,” Frank knows Englishman of Ultra Scan, a Dutch agency that specializes in financial fraud cases. It is a pyramid game that once burst out. ” Damac blies het zogenoemde Palm Springs-project af toen bleek dat men niet eens beschikte over bouwgrond. Certainly eighty investors have from England earlier this year from Dubai developer Damac Properties put under pressure because the luxury apartments were sold but not delivered, even stronger: Damac blew the so-called Palm Springs project off when it became clear that not even available on plot . . Later that was again denied and the company will now still six months to the construction to begin. In June unveiled the Egyptian Telegraph – El Fagr (The Dawn) – in a page article filled an even bigger scandal surrounding a 30 million-acre area covered by the denominator Gamsha Bay to the Red Sea Riviera in Egypt by Damac would be developed as a vacation area. Prime Minister Ahmed Nazif was at the presentation in 2006 and since then there have been 100 million euros to purchase contracts signed. Until various ministries in Egypt peril smoking: the area contains mines, there is oil under and is not suitable for human habitation. Indeed, this area is no formal ownership of Damac. Malika K. diverted, while they worked for rival Omniyat, (criminal) to customers Damac, which they 8-9 percent commission was, according to intelligence data. Piquant detail is Damac El Fagr according to former agents of the secret service as sellers had hired. During his investigation into possible investment frauds of Palm Invest private detective Englishman has an account code detected by Malika at Credit Suisse in Lugano, which they used for money laundering. From this account would be tens of millions of dollars were transferred to Dubai. At Schiphol by the Royal Military Police on August 16 arrested again a money courier who claims that he works for Malika. The man flew from Amsterdam to Milan and from there would go to Dubai. . The Royal Military Police would like this against Revu not confirm. We do not have communications arrested persons, unless we come out themselves.” The arrest of a Turkish money courier in October 2007 was for intelligence agencies to cause great alarm to save on their ‘Malika’. They had to investigate suspicious money flows in the fight against international terrorism, but showed itself at the center of this network are. Jan Libbenga also http://www.revu.nl/12003 http://translate.google.com/translate?sourceid=navclient&hl=en&u=http%3a%2f%2fwww%2erevu%2enl%2f12003

International intelligence agencies and criminals are hunting the

32-year old Malika K., a Dutch infiltrators on the wrong side of the

line landed, and that during her work for intelligence agencies grew

into a broker in criminal relations.

The Amsterdam of Moroccan descent is suspected from its place of Dubai international drug shipments to finance and facilitate, including XTC-Dutch merchants. According to rough estimates in recent years, there were more than 100 million euros through her hands. Many criminals showed their traditional money laundering addresses in the lurch for Malika K.. Attempts to her earlier this year failed to hold. Malika M. is wanted for money laundering, fraud, receiving stolen goods, arson, kidnapping and the commission for liquidation.

http://fraudconstructions.wordpress.com/about/

The Times of Flipper over ? Ouf! That’s pretty gloomy

Reassuring investors during disputes is paramount

http://www.arabianbusiness.com/540868-reassuring-investors-during-disputes-is-paramount

………And it’s during these uncertain times that one would hope that established authorities and regulatory bodies are there for support and guidance.

The Government of Dubai has done a sterling job in guaranteeing bank deposits across the Emirate, and government-controlled developer Emaar Properties has been pro-active in attempting to stimulate the stuttering residential sales market.

In fact, rather than behaving like a skittish kitten in a roomful of barking dogs, government agencies in the Emirates have demonstrated remarkable aggressiveness to deal with the problem.

But legal wrangles, such as that what is brewing between prominent developers ACI Real Estate and Define Properties and Dubai’s Real Estate Regulatory Agency (Rera), has left a bitter aftertaste in the mouths of would-be investors in the Niki Lauda Twin Towers dispute.
…………………….

http://www.arabianbusiness.com/540868-reassuring-investors-during-disputes-is-paramount

The Times of Flippers are over ?

Once ACI Robin Lohman said in an interview:

“It is simple. We develop and we flip. We make people money”

http://www.arabianbusiness.com/505737-the-brand-master

comments about ACI:

http://www.skyscrapercity.com/showthread.php?t=538159&page=4

Interview Malika Karoum in Dubai

Interview Malika Karoum Dubai 2008

Dubai Property poker

original published:

ArabianBusiness

http://www.arabianbusiness.com/540596-property-poker

by Rob Corder This email address is being protected from spam bots, you need Javascript enabled to view it  on Tuesday, 09 December 2008

For what some might call semi-professional property speculators and others might call amateur gamblers, the game is up.

Flipping properties – the business of buying villas and apartments off-plan and then selling them before they are built – has made millions for the professionals, but is about to cost the amateurs their shirts.

The problem, as with most gambling, is that it becomes addictive and destructive. The value of money changes as you win it. The descent into dangerous addiction for many of these flippers has gone something like this:

They took a punt on their first property around three-four years ago. The earliest property pioneers, who might have bought a luxury apartment off-plan on Palm Island for less than the price of a granny flat in their home country, watched the value of their investment double, treble, quadruple over the first two years.

These were typically high net worth individuals with diversified portfolios who were well-judged in taking a punt on embryonic real estate laws and a visionary development.

Word spread that easy money was being made and the amateurs poured into the market. Conditions were perfect: the market was rising fast; disposable incomes were high thanks to relatively cheap living costs at the time (yes, they really were low four years ago); and banks were ready to lend money to anybody with a reasonable salary certificate.

A gambler would probably have started relatively small, perhaps a modest apartment in Jumeirah Beach Residence. But when that property doubled in value before the tower’s foundations were laid they borrowed again from the bank using the paper profits from their first apartment as collateral.

The banks were even more willing to lend because the punter had a tangible asset as security. Now the player could double-up.

A year or two later, nerves began to set in about the Dubai property market. There was a lot of talk of bubbles bursting and it seemed a good time to cash in those chips. A lot of this profit taking went on at the beginning of 2008, heralding the first signs of a correction.

But the gambler was now hooked. The original investment of 500,000 dirhams had been turned into five million dirhams, and the money was burning a hole in his pocket.

The Dubai market looked like cooling a little, but Abu Dhabi was still red hot. The time for the big play had arrived. Five million dirhams used as a down payment on off-plan property in Abu Dhabi meant the same trick he pulled a few years earlier in Dubai could be repeated in the UAE capital.

If Abu Dhabi followed the same trajectory as Dubai, reasoned the gambler, five million could be turned into 20 million or more.

Then September hit. With hindsight we might now call it the Ramadan Rout. Credit markets seized, making it impossible for property developers to find finance for future projects and individuals unable to borrow money for a mortgage or even a rent cheque.

Confidence evaporated overnight. It was impossible to track the rate property prices were falling because no transactions were taking place. Worst affected was the off-plan market because nobody wanted to buy property that might be worth less when built than it was on paper.

The loss of confidence was not contained to Dubai. Abu Dhabi was hit too. The gambler was suddenly in a cold sweat. When the developer building his properties completes the construction, he will have to find a mortgage to cover the outstanding balance of the price he paid.

But the banks are no longer lending. The properties could already be worth less than he paid for them and the banks do not want to take the risk of lending against a depreciating asset.

If he can’t secure a mortgage, the gambler is sunk and the properties will be repossessed by the developer. The only remaining hope is to sell at a fire sale price before the building is completed.

This is the picture that is being repeated across half-built real estate developments throughout the GCC, and it explains why prices have fallen so far and so fast. Thousands of speculators have to dump their properties before they are completed.

There is no short term fix that will reverse the trend. There is only a hope that prices will eventually fall so far that bottom-feeding investors return to snap up bargains.

The irony is that the same professional property dealers that made a killing on the first off-plan developments will be back to make another killing at the end.

Between times, the amateur gamblers have been on an exhilarating ride, but now many are left to rue one big bet too many.

 

 

Property Scandal -Dubai developer demands up to 88% increase on price to pay construction costs | Dubai Property

Dubai developer demands up to 88% increase on price to pay construction costs Dubai Property

original published: AME info
http://www.ameinfo.com/176241.html

The company behind the Prodigy development in Dubai’s Jumeirah Village, MiNC, has sent a letter to investors asking for extra capital to cover construction costs after cash flow shortages caused by the withdrawal of project financing by the two funding banks.

The letter from MiNC’s CEO explains the company’s financial situation to investors. MiNC says that despite the land purchase being finalised in October 2006, Nakheel only actually delivered the land for construction in May 2008. This has led to: ‘
A significant negative impact on the project; a doubling of construction-related professional fees and a large increase in government imposed costs.’ In addition: ‘The arrival of the global financial crisis has had a severe impact on the monies MiNC has available to build Prodigy 1.
We are no longer able to subsidise construction of the project; the project needs to be self-funded as originally intended.’

MiNC faces two further problems. New regulations introduced by the Dubai government have meant that the company’s original economic blueprint of using finances from the whole project to fund construction on Prodigy 1 is no longer legal. This has then been compounded by the withdrawal of project financing by two local banks.

Difficult financial situation’We are in an extremely difficult situation,’ Simon Everest, Director of Operations at MiNC told AME Info. ‘Banks have pulled all the finance, so we have the choice of either sitting, doing nothing and waiting it out, like some of our competitors are doing, or we need to find another solution.’ The problems have meant that though most of the units in the seven towers have been sold, and the company’s escrow accounts are up to date, the project is no longer financially viable. MiNC claims that it would make a ’significant and material loss if it were to build this project’ and it ‘can no longer afford to subsidise this loss’, according to the letter sent to investors. As an example, MiNC is asking buyers to pay an additional Dhs326,000 on units originally sold to them for Dhs370,000, a mark-up of 88% on the original price.

The developer also asks that investors pay the increase up front, with the remaining instalments as per the original terms.
The charge will then go to pay for construction costs. In return for this the company is trying to mitigate buyer displeasure by guaranteeing 8% rental returns on the increased purchase price. MiNC is also playing on the fact that, at Dhs1,000 per square foot, the units are still below market rate. ‘The market is short of new buyers at the moment and as they cannot sell at a higher price, they are in effect re-selling the same apartments back to the original owners at an increased price!’ an investor in the project told AME Info.

‘When we spoke with their London office, and contacted their Dubai office, the only options were – give us the money we have asked for or lose your apartment and 30%.
MiNC are saying that per the new law they will be able to retain 30% of the purchase price, even though we are not in default of payment.‘
Responding to this comment MiNC said: ‘We do not intend to confiscate all or part of clients’ deposits, and have not in any way threatened our clients in this regard.’

Permanent suspension of workThe letter continues: ‘The current economic climate and the impact on the property sector are unique… Events outside our control have forced us to make difficult decisions. We believe that our proposed course of action will help us meet this target [of delivery in June 2010]. Failing this, we fear that the project will be suspended, possibly permanently.’ The response from investors contacted has been understandably negative so far, with many refusing the terms: ‘If I wanted to buy an apartment at Dhs1000 per square foot back in November 2006, I could have put a little more in and bought in the Marina. As an investor in this company, I feel like I have been robbed of my savings and profit.

I have looked at the market and apartments in Jumeirah Village are selling for under Dhs1000 in the current market.’ If the response by even a large minority of investors is negative then MiNC will not have the funds necessary to begin construction and those who have advanced the extra money will have their funds returned and the company will wait for bank funding to resume. ‘We initiated a meeting with the Land Department to get them to intercede on our behalf with the banks,’ said Everest, ‘and they put pressure on them but we’ve had no joy. Our next move if the buyers don’t accept the deal is to return the money, sit it out and wait for financing. But it is our intention to build every single one of the units.’

UPDATE: Subsequent to the publication of this article MiNC has issued a statement to AME Info stating: ‘We have taken steps to reduce the premium requested from clients to a maximum of 30% or Dhs200,000 (whatever is the lower), as a handful of purchasers that bought at pre-launch prices (less than Dhs600 per square foot) have rightly pointed out that the premium requested of them was excessive.’

Real Estate Agents: Dubai Boom Is Ending

http://blogs.wsj.com/economics/2008/10/27/real-estate-agents-dubai-boom-is-ending/

Stefania Bianchi, Mirna Sleiman and Stefania Bianchi report from Dubai for Zawya Dow Jones.

A six-year real estate boom in Dubai that spurred a $475 billion building frenzy has ended, according to agents who say sales are collapsing amid fears that the global economic downturn will hit the sheikdom.

“Last month was a real disaster and worse is coming I guess,” Mehdi Zoghbi, an agent at Middle East Real Estate Consultants, told Zawya Dow Jones Sunday.

Zoghbi says that desperate sellers are now offering off-plan properties on the secondary market for a zero premium, effectively accepting a loss on their investment in order to offload quickly. Dubai, the first Gulf sheikdom to allow foreigners rights to buy homes, may also be the first to see a crash in property prices.

“Our commissions have fallen by up to 70% recently,” said Khaled Daji, an agent at Al Jabal Real Estate. “The most hit are the projects under development and those luxurious high end. We plan to survive for another six months to see how this crisis unfolds.”

But the city’s biggest developers like Emaar Properties PJSC and Nakheel are adamant that sales remain robust. Mohammed Alabbar, Emaar’s chairman and one of the architects of Dubai’s real estate boom, said in the company’s third-quarter statement that “we are very confident of our company’s fundamentals and future growth.”

That hasn’t stopped investors dropping the company’s shares. Emaar’s stock has fallen 62% since the beginning of the year, that’s more than the 48% fall in the Dubai Financial Market’s main index over the same period, according to Zawya.com data. Earlier this month, Colliers International said the growth of property prices in Dubai slowed to 16% in the second quarter of 2008 from 42% in the first quarter. Morgan Stanley warned in August that property hotspot Dubai could see a 10% fall in prices by 2010.

A collapse in real estate prices will add to pressure on Dubai’s economy, which doesn’t benefit from the vast oil income enjoyed by neighboring Abu Dhabi. Property and construction are estimated to account for about 30% of the emirate’s economy.

Meanwhile, the nerve – and wallets – of Dubai’s shoppers will be tested this week when, against a tide of global economic woe, the region’s largest shopping mall opens. Covering an area of more than 50 soccer fields, Dubai Mall will have more than 1,200 shops; one of the world’s largest indoor gaming arcades; an Olympic-size ice rink; the world’s largest indoor Gold Souk; and one of the world’s biggest aquariums, which will be home to more than 33,000 types of sea life, including over 400 sharks.

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Global recession resulted global oil, housing, commodities asset prices bubbles burst, plunge more than 50 % will be spread into oil consuming and oil producing countries
details on
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Comment by Warren Huang – October 27, 2008 at 7:19 pm

cool article

Comment by hue g. rection – October 27, 2008 at 8:06 pm

Stefania and Mirna, thanks for this article. Interesting to see how other people are living and investing.

Comment by tom a taxpayer – October 27, 2008 at 11:08 pm

A fall in prices may actually benefit Dubai in the long term.

The escalation in cost of living in Dubai, driven by property and rent prices, has become unsustainable.

And speculation will end leading to more realistic valuation of assets.It has clearly been a speculative market when a

down payment of 20 per cent provides a 100 to 150% per cent in a less than a year from property flipping.

Comment by Dave Stern – October 28, 2008 at 12:35 am

As someone who lives “on the ground” here in Abu Dhabi, I can tell you that Dave Stern’s comment is incorrect:

the locals have been taking out personal bank loans to cover just 2 to 3 month’s mortgage payments and then

flipping properties within that time (not a year!).

They were buying up to six properties at a time in this manner.

These purchases were all “off plan”, the properties were not even under construction.

This is why the real estate market was, ultimately, unsustainable.

Comment by Jan Newton – October 28, 2008 at 1:02 am

I have been a doomsayer of the Indian real estate market when I predicted the fall in February 2008 -

 http://www.eclectic-investor.blogspot.com
The Arabic leverage is up to 100 times capital. I have personally know of business center receptionist

doubling up as a “real estate flipper” and now has overleveraged and stuck in properties that are not even

under construction. It is normal for authorities to blow their trumpets, but expect their sounds to end in a

Big Blowup in their faces.
A cataclysmic disaster and perhaps the start of Dubai’s fall like Beirut before and Aden even before that.

Comment by Cataclysmic Collapse of Dubai Expected – October 28, 2008 at 2:26 am

Castles in the sand?

Comment by tom a taxpayer – October 28, 2008 at 2:50 am

Currently panic is ruling the markets all over the world irrationally.

There is no exception, however, the Arabian Gulf have strong economic fundamentals and the recovery

will be much faster than in the West. As a matter of fact, the Q3 financial results of the biggest market players

for the are better than the Q3 results in 2007.
From the position of commercial property broker in Dubai, I can assure you that corporate end-users are good

clients at the moment. We have sold office floors in Business Bay during the last month and recently preparing t

he transactions of commercial properties in Jumeirah Lake Towers.

In times of crisis there are losers and winners.

Comment by Gergana Mineva – October 28, 2008 at 4:33 am

When junk emails started arriving in one of my “special” email boxes – promising pie-in-the-sky

pre-construction deals in Dubai – went Short Oil and Emerging Markets ETFs (Thank you, Goldman oil analysts!!!)

Comment by Federales – October 28, 2008 at 6:23 am

Mr. Gergana Mineva!
It is Persian Gulf not Arabic.
Please use always the correct name in the future.
Thank you!

Comment by Farhad – October 28, 2008 at 7:21 am

Farhad, Dubai is essentially ruled under Shirah Law, a cruel brand of despotic fascism that harms

women and children and is antithetical to freedom. Dubai though more “progressive”

than most repressive regimes in Sand Land, hates Jews and will not allow the

practice of such a “heinous” religion as Judaism. Yet you are worried about words and nomenclature.

Words are meaningless, actions are all that matter.

Comment by Kafka – October 28, 2008 at 8:32 am

OPEC’s manipulation of oil prices and speculators caused this current recession by increasing oil prices to historic levels.

Comment by Blame OPEC – October 28, 2008 at 11:16 am

Market is certainly undergoing a correction but to predict doom is a little foolhearty.

There is TREMENDOUS liquidity in the market and the reserves built up during the period of

high gas prices will certainly be deployed to stablize the realestate market which is the cornerstone of ‘

New’Dubai. Also, Dubai is NOT ruled by shariah law. In fact, it is one of the most modern states

in the gulf and is known for its liberal political/social environment (recent stories about sex on the beach

 not withstanding). There are a number of very successful american jews in the city so the anti-semetic

claim is just rubbish. There is no law against practise of ANY religion.

Visit the region before speaking

Comment by DubaiDreamer – October 28, 2008 at 1:33 pm

The smart money has begun the pull out already. Bank lending is drying up.

The only ones who continue to believe that the real estate market will go up are real estate agents

and speculators who have not been able to off load so far. The secondary market for off-plan properties is in a free fall.

And no amount of deliberate project delays and throwing people out of villas is going to prevent the serious

correction that Dubai property so badly needs. It has been the most speculative, unregulated and unprotected

market the past 6 years.

Comment by Kingsley – October 28, 2008 at 1:55 pm

couldn’t have happened to a nicer group of people…

Comment by charlie – October 28, 2008 at 2:13 pm

Gee, I guess the Arabs are poor for a reason = incompetence.

High oil prices masks the basic incompetence for awhile. But stupid is as stupid does.

Comment by CaliPOWER – October 28, 2008 at 2:17 pm

Cry Out Loud and you all say what you want about dubai …BUT The truth is: We Are All Loooosing!!

The whole world is sinking…

Comment by The True Man – October 28, 2008 at 8:44 pm

Kingsley makes some good points, Dubai is in need of regulation.

Prices may be predicted to fall, but it isn’t happening yet in the rental market.

Buyers have bought up so much of the properties and now are holding them until they can get

their desired selling price (usually expected 20% increases from sale to sale)…leaving the rentail market

struggling. Landloards can demand rents starting at $25,000/yr in ONE payment upfront for 450 sf studios…in empty,

 construction sites of buildings! Dubai is leaving no room for renters & the middle class.

Rents are still exorbitant and there are few regulations in place to support the renter.

Comment by MRODubai – October 28, 2008 at 11:40 pm

As someone who lives and breathes real estate since its first days here in Dubai,

I feel it is necessary to see the cause of the boom and only then we may be able to make some

calculated estimates of the future market condition.
1. Dubai real esate growth was based on a promise of freehold, residence permit, tax free benefits

for nationalities who have certain restrictions in their countries and saw dubai as a safe secure investment opportunity.
2. Government of dubai removed the residence permit guarantee by buying a property.

So automatically no tax free status, coz if you are not a resident of Dubai you can not open

bank account & you are still liable for taxes in your country.

Comment by real estate expert – October 29, 2008 at 12:21 am

3.Nakheel/emaar/dubai holding factor: All these companies hate each other and therefore fight for the

attention of sheikh mohammed, which means the greed and ego overtake logic and feasibility!!! result:

Excessive lands/properties/ mega projects without proper planning & infrastructure in place.
4. Universal law supply Vs. Demand: nobody realises that the already anounced projects in dubai will need

about an extra 6 million people to live in it!!!! (From Lagoons, meydan, dubailand, tatweer, mizin,

industrial projects, emaar, bawadi, the world, the universe, palm deira, port rashid, waterfront, arabian canal,

dubai world central….)Excuse me thats almost double the UAE population.

Comment by real estate expert – October 29, 2008 at 12:29 am

5. Loose the Confidence You loose everything: The investors/buyers are wakening up to the reality & there is

absolutely no confidence in the market not only because of the global financial crisis but mainly because of the

over supply & fear of the crash.

6. Genius Government policies: dubai government is its own worst enemy, at times like this what does dubai do?

They launch new mega projects & new development companies like meraas with ambitious projects that will only

further dampen market confidence.
7. Investor’s security: Dubai’s judicial system is as good as any underdeveloped country with selective rights

depending who the complaint is against.

Comment by real estate expert – October 29, 2008 at 12:35 am

8. No human rights when it comes to dubai police. infact torture and enforced disappearance has become

common in dubai under the umberella of the state security they can attach anything to anyone to reach their

commercial targets.
9. Everybody owns 20% of several properties: Paying a few installments does not make you theowner so when the next installments come due and there is no quick sales like the good old days, what happens? Sell below the price or lose your deposit with the developers…. results in what we call “stress sell”

Comment by real estate expert – October 29, 2008 at 12:40 am

10. Oil prices & Inflation: ofcourse oil prices doubled so did the cost of steel & cement & food & labor

accomodation… result abnormaly increase in construction prices on a weekly basis!!!… so an increase

in property prices due to rising cost….
11. Decrease in Oil prices: Sudden decrease in everything from food prices, to raw materials…..

creating sudden panic as properties are cheaper to build and a fear of further reduction is iminent.
12. There are too many chefs in the tiny real estate kitchen of dubai, have you noticed there aren’t any

happy faces in the media anymore!!! what happened to the so called international anouncements about their acquisitions…

Comment by real estate expert – October 29, 2008 at 12:45 am

13.The Sheikh factor: when the ruling family is desperately getting into everythng from real estate,

to owning or managing coffeshops and bakeries, landries…. then the opportunities for the public is becoming less

and less which means a lot of unhappy UAE nationals and residents…. which everyone know will not help the already

unstable state of dubai.
14. Big brother factor: let there be no doubt Abu Dhabi will eventually overtake dubai for the right reasons.

 money is not an issue thanks to oil & there is no rush to sell everything just to raise funds for the previously

anounced project like in dubai. Dubai’s power in UAE will be reduced due to lack of funds, money talks!!!

Comment by real estate expert – October 29, 2008 at 12:51 am

15. regulatory body with no teeth: RERA is supposed to ensure that developers/real estate agents

/ landlords/ follow the rules and regulations… what happens if a developer or an agent does not follow the law?

 NOTHING… just a 100,000 fine… comparing to the hundreds of millions at stake its a drop in the ocean.
16. Public Prosecution & Corruption: Everything in public prosecution is relative & variable…. there are

cases of misrepresentation by nakheel, for example selling thousands of villas

 and after 2 years just cancelling the project…. nobody can make a complaint.

Likewise several private developers & real estae agents operating in a fraudulent manner are let go off the hook.

Comment by real estate expert – October 29, 2008 at 1:54 am

Take away the speculation and in the end it comes back to fundamentals. Rental yields on finished

properties are currently 2-5%. Interest rates on property loans are 8-9%. Deposits on property

purchase are 30% minimum. If you want to buy a 2 bedroom apartment in a decent location you

would need to be earning US$200k to meet the lending criteria. The stock market in the Gulf has

fallen 25% in th elast 30 days and real estate stocks by 60% in 9 months.

Look for similar movement in property values.

Comment by steve – October 29, 2008 at 5:20 am

Main reason dubai eco will collapse is the RUSSIAN factor.

Comment by GB Bajaj – October 30, 2008 at 1:58 pm

The comments entered by the real estate are very impressive/ Truly an expert.

Comment by Admirer – October 30, 2008 at 4:08 pm

Great comments by the real estate expert as i call dubai an artificial market. There is onemore important point

that expert forgot is what will happen after Sheikh Muhammad as UAE history says e.g.Sharjah.

Advice to all expat go back to your homeland and serve for your country as Dubaidoes not have a

nation like Oman, Bahrain , Kuwait or KSA.

Comment by Fact Finder – October 31, 2008 at 7:18 pm

Well it seems everyone here is pretty sure that Dubai Property Market is done and huge Crash is in Pipeline

(or is already there). Well no matter how much we want it but it’s not entirely Ture. The Factors Mentioned

by “Experts” here does not have much impact on property market. Property Market depends on

three important factors. 1) Creations of new Jobs and thus Movement of New People to area

2) Amounts of loan banks willing to give 3) Pricing of the property
In Case of Dubai, Companies are still very much eager to open up an office here which saves them 30% to 40%

in direct Tax fromtheir own Country. That Means new companies, new Jobs, new demand.

Comment by Real Estate Investor – November 1, 2008 at 8:56 am

it is easier to open an Office in Dubai than Buying BMW in U.K. It Still Costs AED 10,000/-

and every employee gets residence visa (AED 8000 per employee for three year) hence TaxFree status.

Dubai Government investing in own companies E.G opening up Hotels, Telecome, Café and everthing

else is also very Good for Dubai. Since 30% to 40% of Dubai’s Expat population

work in these Companies shows how serious Dubai Government is in bringing people to Dubai.

The 2nd factor is the bank Finance and that’s a problem right now. Due to Global Crisis Gulf Banks have huge

Liquidity problem and that’s the reason they have Stopped Finance,(Yes Stopped) Most Banks have Already

Reached their Yearly tar

Comment by Real Estate investor – November 1, 2008 at 8:57 am

Most Banks have Already Reached their Yearly targets of cash outflow and Simply don’t have cash for mortgage.

Hence the finance buyer which is about 60 to 70% of market cannot buy. BUT from Jan next year Banks

will have fresh cash and hence finance will be back on track. Since Finance will be back the property market

will tend to rise again.

The 3rd Factor Pricing – Yes Dubai prices had increased on massive pace and yes things were gone

up really fast but still prices were not par will other countries (similar metropolitan cities) and now

with the correction in property prices due to the Financial problem the prices are even more attractive.

Comment by Real Estate investor – November 1, 2008 at 8:58 am

No place in the world can sustain to grow above 40% annually but prices only crash only when the demand dries up. Like in U.S and U.K where most citizen already own a home and new migration is only 1 or 2% of population where as in Dubai its at 28% to 40% every year and most people here still live in rented houses. Now with that kind of new people market will not crash but yes the growth can slow to 10% to 15% will is more realistic level.

But everything’s not that great also, Dubai Needs to a lot more to keep growing and attracting

more expats E.G Allow more foreign ownership in local companies, give more Rights to expats,

and introduce permanent residency with work permit.

Please let me know if some one thinks the other way

Comment by Real estate Investor – November 1, 2008 at 8:59 am

The UAE is now a ‘Buyers’s Market’ and I hope developers improve incentives such as back-loaded payments plans etc.

Real Estate Dubai

Comment by Andrew – November 1, 2008 at 1:32 pm

in dubai…reality is, the dubai govt thinks just like any other govt in the world i.e. india, usa, uk, japan etc.

nothing is done in dubai unless its severely needed [i.e. metro] and then its splashed with every god

damn adv from lipstick to lingerie to condoms to repay the loans taken for it. Y?

coz dubai govt HATES HATES HATES to pay for it from its pockets.

Comment by analyst expat – November 1, 2008 at 3:45 pm

To the “Real estate Investor” who does not have a clue of what this place is like: re-read the comments

by the “real estate expert” and by “Fact Finder” and then get rid of your investment as fast as you can and while you can.

Yes, you would be safer if you were in Kuwait for instance, but not here. Get out of your circle and talk

to others and get to know the real picture. Does “Pirate Coast” mean anything to you?

Comment by Yet another fact finder – November 2, 2008 at 1:01 am

Dubai has been trying to imitate the West for a long time now.The current situation is a predicted end to its Western dreams

Comment by Shaiju Janardhanan – November 2, 2008 at 6:10 am

excellent article… it’s so nice to read objective and realistic articles (and comments) about dubai and

their real estate market. i’m absolutely sick of reading blatent property (or any other) propaganda in Dubai’s “Newspapers”.

Comment by michael – November 2, 2008 at 6:55 am

i have read your article. wish to know few details regarding the Rental Index on Residential & commercial Properties.

There is a situation which were i have (a tenant) is going through tough time in Dubai

i have rented a Shop inside a Shopping Mall from past 4 years which was running in losses.

From 10 months the customers have raised and he was doing the Breakeven.

Suddenly the Mall is sold and New Landlord is asking for New RENT 40% increase and he is showing a

document of RERA stating landlord can increase the Rent to Market Rates.
i have put all his money in the business and may go bankrupt incase the situations goes out of hand
NEW LAND LORD IS AWROSTAMANI REAL ESTATE

Comment by Qurashi – November 5, 2008 at 7:26 am

Hi guys, am glad some of the readers find my comments useful. I just would like to add that god forbid if

anything actualy happens to our “super man sheikh” (Sheikh Mohammed) the entire wolves surrounding

him will start eating each other as history has shown in the gulf.
HSBC & lloyds TSB have stoped giving out mortgages to apartments in dubai what does that tell you?

PROPERTY CRASH is inevitable but the question is how hard it will hurt the government who has nothing in the account.
I hope I am wrong, but rumor says sheikh mohammed has had a stroke and an operation.

God help all those who still continue to dream and believe the wonderful animations of dubailand and nakheel!!

Comment by Real Estate Expert – November 11, 2008 at 10:44 am

The real estate market in dubai has crashed already. I bought a few floors from Dynasty zarooni’s sheffield project in dubai waterfront at 2700 dhs per square feet, today i can not sell it 30% below the purchase price. Why because Dynasty Zarooni does not even own the land & they don’t even have an escrow acount, yet people have paid over 20% to their acount and there is no construction on site. RERA knows about it but does nothing.

Comment by Dubai Resident – November 12, 2008 at 2:54 am

Really impress with your knowledge Real Estate Expert. Keep us updated to whats happening in Dubai Real Estate and when it will be a good time to buy probably an year from now.

I am based in Canada real estate here is doing reasonably well small 5% correction which is normal and acceptable.

no major job losses or recession predicted yet Canada has a sound economy.

Comment by Real Estate Crashing – November 15, 2008 at 4:03 am

The nightmare is here…Great analysis by Mr. “Real Estate Expert”

Comment by Dubai Nightmare – November 16, 2008 at 6:50 am

It’s time that speculators lose something. Earning hunderds millions was not normal.
I never believed Dubai, never, it was bluff, very well supported by propaganda. Crisis will clean it up.

Comment by Azizi – November 19, 2008 at 8:11 pm

I wish real estate expert had published these comments in dubai dailies… thousands of small investors

like myself would not havebeen trapped in unrealistic promises.

Today my property is worth 40% less than what I bought it 4 months ago.

I blame the government for bringing so many projects into the market and killing the confidence.

Why are they quiet. Real estate expert how can I get in touch with you for some advice… email?

Comment by Silvia – November 20, 2008 at 3:35 pm

In the 1980s and 1990s, Dubai used to be such a fun place to live in. Good medical, good salaries, good savings.

Today, expats are lucky to save even 5% of their income and stress levels have gone through the roof.

Traffic jams 24 hours a day, near impossible to get street parking, a 45 minute wait to get a taxi.

Indirect taxes in the form of extremely high rent and huge fees on everything related to living in Dubai.

Before, people treated you for who you are. Now they treat you based on what you drive, where you live

and how much you earn. Dubai is no fun to live in anymore, rather it is a materialistic society amidst an ugly

 poorly planned concrete jungle where the rule is eat or be eaten

Comment by Ex-Dubai Expat – November 21, 2008 at 6:35 am

Fortunately avoided the market here as I read the contracts and evaluated the risk given the emerging legal infrastructure.
Very little sympathy for those that bought, as they knew that the potentially high returns came with equally high risk.

Unfair to blame the Gov’t they have been putting the right regulatory structure in place, but this usually takes years.

The region needs a Dubai and I have no doubts it will be a regional powerhouse.
In the short run I expect an 80% drop in values, much like Singapores correction in the late 90’s.

Comment by sulli – November 21, 2008 at 6:40 am

Been in UAE since 1994 but lost the bull market due to over protectiveness any way nothing to cry for,

can see one more coming in the near future as I have seen these happening in the past, unlike India from

where I come from, Dubai is not seen as a permanent residenence for most of the expatriate community

residing here, Most of us especially Indians are phobic of the locals and have been taken undue advantage

by the local youths and some most of the GCC expatriates and in my personal experience worst among these

are the Palestinians who seeems to have no respect to another human being now saying that, since no expatriate sees

UAE as his future home but a stop gap arrangement to make a

Comment by Lost Bull – November 24, 2008 at 2:26 pm

quick buck, which attracted the soldiers of fortune around the world, and persons with questionable past and

 present but with a huge wallet even though there were some sort of regulation put in regarding the money transfers,

there seems to be money flowing in from every were, Now in India we have a huge population and we have absolute

need for housing even it is rare to see such an mega project as in Dubai even with some of the worlds richest persons residing

there, Anyway before coming over to Dubai I used to travel around the world and it surprised me in 1994 why

Dubai did not have MRT which was very much common even in small countries such as Singapore,

And it surprising and at the same

Comment by Lost Bull – November 24, 2008 at 2:44 pm

extremely frustrating that you cannot travel back in the same taxi of other emirate unless you have engaged

 it for a round trip, about just 2-3 years back an inter emirate buses started plying the roads.

Once the real estate market started selling there were lots of people rushing in to buy assuming that they can forsee

a stable future with permanent residence visa status if they bought a free hold property which did not materialise,

again the only option that was left for all to make a quick buck when the boom lasted, Extremely well marketing tools

 were used to attract people from all over the world with a promise of living on beach life style, and compared the

prices to the major cities

Comment by Lost Bull – November 24, 2008 at 3:00 pm

found it to be cheap minus the infrastructure to support such a rapid developement, due to all projects going on simultaneously,companies ,man power, machinery and materials started flowing in and competitiveness within the developers started pushing the price upwards, speculators started rushing in prices went beyond the reach of genuine end user, any product which becomes unaffordable to the end user shall not sustain its existence so the crash in the market was inevitable, But even in this period there are plenty of genuine buyers if the prices are affordable and without high maintenance charges for the upkeep it is upto the developers to recognise, presently there are lots of projects

Comment by Anonymous – November 24, 2008 at 3:15 pm

being shelved, scaled down and going for a rebiding ( face saving tactics), speculators immediately stated off loading their stocks , few with sustaining power shall hold untill they cannot afford to pay their mortgages any more, companies have already started retrenching, rents in Dubai started droping,bank interest rates have incresed, come March ( end of academic year)2009 we will see an exodus of families saying goodbye to UAE since it is not worth for them to be live here any more, and then the real crash starts…….. Advice time : 1. Do not panic this is not a end of the world 2. If you cash start investing in the shares 3. force banks to reduce the interest rates and extend the

Comment by Lost Bull – November 24, 2008 at 3:31 pm

repayment period. 4.Hunt for good bargains in the real estate property market start buying hagle with the developers,5.

This is good news as there is very sustainable future ahead for those who weathers this strom 6.

Live life comfortably as you will not take anything when you are dead anyway 7.

Pray for a good health during this stressful period ……… May God Bless U.A.E and its Rulers

Comment by Lost Bull – November 24, 2008 at 3:41 pm

Looking for real estate in Dubai? Property Portal connects you to hundreds of sales and investment opportunities

in the world’s hottest real estate market.

Comment by server Baig – November 25, 2008 at 5:29 am

money-grubbing pigs deserve to wallow in their own filth

Comment by rich man poor man – December 1, 2008 at 6:54 am

well dune dubai dream..!!

Comment by ignorent – December 6, 2008 at 4:08 pm

to all Dubai haters i say “moral indignation is jealousy with a halo”……

Comment by Wells.H.G – December 11, 2008 at 1:36 am

i believe that rich man poor man’s comment is logically directed towards the party that created this

worldwide financial crisis, which naturally is not Dubai…..see what i mean !?

Comment by Wells.H.G – December 16, 2008 at 3:01 am

 

Industry corruption – Construction & Industry – ArabianBusiness.com

ArabianBusiness
Wednesday, 08 October 2008

Recently in the UAE there have been several reports in the media of senior personnel in a number of companies who are being investigated for corruption or worse.No doubt this being part of the government’s continuing initiative and resolve to fight corruption and punish those that are guilty of it.

The World Bank has estimated that bribery costs the world approximately US $1 trillion each year. Such a sum can only adversely affect the economic growth of developing countries, which can ill afford such cost.

The Emirate of Dubai has set up the Dubai Ethics Centre in order to train employees to be able to guard against and be aware of all forms of corruption. On a Federal basis, the UAE in 2006 signed the United Nations Convention Against Corruption.

Moreover, the UAE has continued to support the Organisation for Economic Co-operation and Development (OECD) in its initiative to combat corruption and in April 2007 announced that the UAE was joining forces with the OECD to strengthen tax co-operation between the countries of the Middle East and Middle East and North Africa (MENA) and between those countries and the OECD countries.

It is therefore not surprising that with these actions and initiatives the World Bank reported in July 2007 that the UAE scored 83.5% in its World Wide Government Indicators, the highest score not only in the GCC countries but also within MENA.

Corruption might be defined as “one party providing inducements to another party to get them to do, or refrain from doing, some act differently from what they would otherwise have done.”In the construction and engineering industry this does not have to be the type or magnitude of corruption which grabs headlines but could be far more modest yet still effective and worse, still corruption. Examples of these could be putting someone on a bid list who might otherwise have not been included. Leaving someone off a bid list who in other circumstances should properly have been included.

Providing details with budgets, which to potential bidders can be information that is invaluable in the bidding process as well as during the negotiation stage. Giving price details of other bidders, giving an obvious unfair advantage to the recipient and making a nonsense of the bidding process.Frequently contracts are awarded on a lowest price basis, but even if they are not, the bid which is lower than those of other bidders will give the bidder an advantage over the others.One area in the construction and engineering industry that features high on the list of likely areas of corruption is the awarding of contracts. It does not have to be a major contract, it could be any contract including a supply contract or services contract, and of any value.The acceptance of a requested variation or claim can for a contractor or supplier make the difference between loss and profit, and sometimes considerable profit if accepted.Corruption does not necessarily flow from the contractor or supplier it could also be directed against the consultant in order that the consultant rejects the request for variation or claims, in which case the contractor or supplier loses but the employer gains.

Nine actions to avoid corruption and enhance good business practice

1. Always investigate complaints. If an allegation of corruption is made do not dismiss it, no matter how unlikely it may appear.

2. Require tenders to be prepared with separate commercial and technical submissions. This ensures that at the outset at least, different persons within the organisation review the submissions.

3. Open tenders together. If it is a public opening ensure that all persons who wish to attend are able to attend, including some without any interest in the outcome. Where it is a private opening then ensure that it is carried out with witnesses who can attest to the correctness of the bid opening procedure.

4. Rotate bid teams. The changing of personnel within the bid review teams is good practice in any event, especially where there are tenders for specific scopes, which may require specialist input.

5. Control entertainment and gifts. Many companies have strict policies as to what can be spent under the heading of “business development”. Moreover, the acceptance of a gift no matter how innocent can be misinterpreted. If no such policies exist then ensure that approval is sought before incurring the cost of entertainment or accepting the gift.

6. Require conflict of interest declarations. Indeed require such declarations to be in writing and signed by all those who are involved in the bid review process.

7. Control contact with bidders. Contact should not be encouraged; it should where possible be limited to communications in writing and when questions are asked by bidders, the answers should be circulated to all bidders. Care should also be taken not to discuss with bidders the subject matter of the bid, particularly where there is already an existing contractual relationship with the bidder on another contract or project.

8. Secure data. Always ensure that information that might be commercially sensitive is kept secure, to avoid it being made accessible to others who are not entitled to see or have access to it. 9. Audit trail on decisions. Whether in a bidding process or other part of a project development or construction where decisions are made, ensure that the decisions made are recorded in writing and where approvals are sought, the person giving such approvals also records the approval in writing.Dennis Brand is senior legal advisor with HBJ Gateley Wareing.

Email:Dbrand@hbj-gw.com

Industry corruption – Construction & Industry – ArabianBusiness.com

ArabianBusiness
Wednesday, 08 October 2008

Recently in the UAE there have been several reports in the media of senior personnel in a number of companies who are being investigated for corruption or worse.No doubt this being part of the government’s continuing initiative and resolve to fight corruption and punish those that are guilty of it.

The World Bank has estimated that bribery costs the world approximately US $1 trillion each year. Such a sum can only adversely affect the economic growth of developing countries, which can ill afford such cost.

The Emirate of Dubai has set up the Dubai Ethics Centre in order to train employees to be able to guard against and be aware of all forms of corruption. On a Federal basis, the UAE in 2006 signed the United Nations Convention Against Corruption.

Moreover, the UAE has continued to support the Organisation for Economic Co-operation and Development (OECD) in its initiative to combat corruption and in April 2007 announced that the UAE was joining forces with the OECD to strengthen tax co-operation between the countries of the Middle East and Middle East and North Africa (MENA) and between those countries and the OECD countries.

It is therefore not surprising that with these actions and initiatives the World Bank reported in July 2007 that the UAE scored 83.5% in its World Wide Government Indicators, the highest score not only in the GCC countries but also within MENA.

Corruption might be defined as “one party providing inducements to another party to get them to do, or refrain from doing, some act differently from what they would otherwise have done.”In the construction and engineering industry this does not have to be the type or magnitude of corruption which grabs headlines but could be far more modest yet still effective and worse, still corruption. Examples of these could be putting someone on a bid list who might otherwise have not been included. Leaving someone off a bid list who in other circumstances should properly have been included.

Providing details with budgets, which to potential bidders can be information that is invaluable in the bidding process as well as during the negotiation stage. Giving price details of other bidders, giving an obvious unfair advantage to the recipient and making a nonsense of the bidding process.Frequently contracts are awarded on a lowest price basis, but even if they are not, the bid which is lower than those of other bidders will give the bidder an advantage over the others.One area in the construction and engineering industry that features high on the list of likely areas of corruption is the awarding of contracts. It does not have to be a major contract, it could be any contract including a supply contract or services contract, and of any value.The acceptance of a requested variation or claim can for a contractor or supplier make the difference between loss and profit, and sometimes considerable profit if accepted.Corruption does not necessarily flow from the contractor or supplier it could also be directed against the consultant in order that the consultant rejects the request for variation or claims, in which case the contractor or supplier loses but the employer gains.

Nine actions to avoid corruption and enhance good business practice

1. Always investigate complaints. If an allegation of corruption is made do not dismiss it, no matter how unlikely it may appear.

2. Require tenders to be prepared with separate commercial and technical submissions. This ensures that at the outset at least, different persons within the organisation review the submissions.

3. Open tenders together. If it is a public opening ensure that all persons who wish to attend are able to attend, including some without any interest in the outcome. Where it is a private opening then ensure that it is carried out with witnesses who can attest to the correctness of the bid opening procedure.

4. Rotate bid teams. The changing of personnel within the bid review teams is good practice in any event, especially where there are tenders for specific scopes, which may require specialist input.

5. Control entertainment and gifts. Many companies have strict policies as to what can be spent under the heading of “business development”. Moreover, the acceptance of a gift no matter how innocent can be misinterpreted. If no such policies exist then ensure that approval is sought before incurring the cost of entertainment or accepting the gift.

6. Require conflict of interest declarations. Indeed require such declarations to be in writing and signed by all those who are involved in the bid review process.

7. Control contact with bidders. Contact should not be encouraged; it should where possible be limited to communications in writing and when questions are asked by bidders, the answers should be circulated to all bidders. Care should also be taken not to discuss with bidders the subject matter of the bid, particularly where there is already an existing contractual relationship with the bidder on another contract or project.

8. Secure data. Always ensure that information that might be commercially sensitive is kept secure, to avoid it being made accessible to others who are not entitled to see or have access to it. 9. Audit trail on decisions. Whether in a bidding process or other part of a project development or construction where decisions are made, ensure that the decisions made are recorded in writing and where approvals are sought, the person giving such approvals also records the approval in writing.Dennis Brand is senior legal advisor with HBJ Gateley Wareing.

Email:Dbrand@hbj-gw.com

Kippreport » Cover Story Real Estate The Work » Dubai Boomtown no more?

Kippreport » Cover Story Real Estate The Work » Boomtown no more?

September 24 , 2008

Yet another company has come forth and said the Gulf building boom is threatened by rising construction costs. ESI International, a project management and training company, says soaring salaries for technical professionals is threatening projects in the Gulf region worth $2.4trn.
Previously, most of the hand-wringing about the sustainability of the region’s building boom has resulted from the rising cost of raw materials, in particular steel and cement, or from concerns that prices would undergo a correction as an oversupply comes onto the market.
Yet cost pressure on the steel and cement front seems to have eased since the start of this year. Gulf

News reported today that the price of steel in the UAE, after rising from Dh3,000 ($817) per tonne early this year to Dh 6,000 ($1635) over the summer, had dropped again back to a more moderate Dh3,500 ($954).

The ESI report is part of a string of warnings about the sustainability of the region’s building boom. In January, Saudi-owned developer Rakaa Properties grabbed headlines with a report that some 40 per cent of the current Dh1.5 trillion ($400 billion) worth of real-estate projects in Dubai had been “temporarily suspended” because contractors and developers could not afford to pay for raw materials, the cost of which had shot up in preceding months.
While steel and cement have come down, concern about costs obviously remains.

ESI is now saying that it’s not just the cost of raw materials that is threatening the boom, but the rising salaries of professionals such as engineers and project managers. Perhaps the statement can be taken with a grain of salt, as it appears to be part of a prepared statement by the company – in other words, a press release.

Business Intelligence Middle East carries the press release in its entirety, noting that ESI International is “the leading provider of project management training and business analysis” and Haddad is “an expert on the attraction and retention of key personnel.”

Still, the fact that companies feel emboldened enough to promote themselves by warning of a slowdown in Dubai’s much-vaunted boom speaks of the obvious strain on resources, both material and human, that is being exacted by growth pressure and rising costs.
If projects’ completion is truly threatened, it complicates efforts to forecast future movements of the property market. Dubai in particular is increasingly talked about as a potential real estate bubble, with regional investment bank EFG-Hermes recently predicting a 20 percent fall in housing prices by 2011 after a peak in the first half of 2009.

Morgan Stanley has mentioned a Singapore-style meltdown, following the model of the Southeast Asian statelet in the 1990s, as a possible worst-case scenario for Dubai.
Yet it’s difficult to imagine that happening if development stalls and builders can’t afford to build fast enough to keep up with rising demand, be it due to rising salaries or soaring raw materials costs.

Mumbai News – Mumbai Mirror Online – Dynasty Zarooni to float a city on water in Dubai, BUSINESS, Mumbai News, Mumbai newspaper,Current Affairs,Latest news,Mumbai Directory,City Portal,Mumbai,city,Bombay,destination,Web,Internet

Mumbai News – Mumbai Mirror Online – Dynasty Zarooni to float a city on water in Dubai, BUSINESS, Mumbai News, Mumbai newspaper,Current Affairs,Latest news,Mumbai Directory,City Portal,Mumbai,city,Bombay,destination,Web,Internet: “Dynasty Zarooni to float a city on water in Dubai”

Mumbai Mirrow September 17, 2008

On August 23, Mumbai Mirror had carried a story about the alleged investigations being carried out by a government agency in Dubai into complaints against real-estate firm Dynasty Zarooni.

On further investigations, we found that the allegations were not true. Kabir Mulchandani, the 35-year-old chairman of Dynasty Zarooni explains why he is in the eye of controversy:

• Mumbai Mirror: What made you shift your base from India to Dubai, and how difficult was it, business-wise, to relocate to Dubai and start from scratch?

Kabir Mulchandani: On a trip to Dubai in July 2004, I witnessed the beginnings of the process of creating one of the finest master-planned cities of our time. I immediately felt a desire to be a part of such a unique phenomenon. So in October 2004, I moved to Dubai and set up my company, Dynasty Enterprises Inc.

The total transparency and speed of transactions in a tax-free environment provided Dynasty Enterprises the opportunity to grow its profits by over 20,800 per cent in three years.

Then, in September 2007, we merged with the real estate group of Mr Hilal Al Zarooni.

Mr Zarooni was owner of a construction and development company, which had over 30 years of experience in developing projects and the retail of luxury goods in the UAE. The merged entity, Dynasty Zarooni Group, created the largest privately-owned investment company in the UAE.

The value of projects of Dynasty Zarooni group, which have been developed; are under development; and have been successfully invested and disposed off are over Rs 26,000 crores and in the process, investors of Dynasty Zarooni Group have made returns of over Rs 7,500 crores.

• MM: This paper recently carried a story about allegations made against your company which later turned out to be false. Do you see any plan by your adversaries in this campaign?

KM: Success has no friends. During the merger there were certain senior executive(s) in the company who felt insecure about their position in the merged entity.

Once the merger was effected, the covert operations of these executives came to light, along with details of other fraudulent activities being carried out by them.

These elements have constantly been working against the interests of ‘Dynasty Zarooni Group’ and have spared no efforts to create fraudulent and fabricated documents, which have found their way into the Indian media.

All allegations that have been given some credence by the fraudulent documents are, therefore, false and baseless. In fact, the Dynasty Zarooni Group has been given a clean chit by the The Real Estate Regulatory Agency (RERA), a body under Land Department, Government of Dubai.

• MM: Who are your competitors? What prospects do you see for your real-estate firm there?

KM: Our unique business model has helped us in fulfilling a niche requirement in the UAE market.

As such, we do not have direct competitors in the market. We already have strategic alliances with Al Fajer Properties LLC, managed by His Highness Sheikh Maktoum Hasher Al Maktoum, a member of the ruling Maktoum family; Business Bay LLC; Dubai Properties; Green Emirates Properties; Hydra Properties LLC; Mazaya Real Estate LLC and many more. All of the above are government, quasi government or listed entities and we are their preferred distribution partners.

The outlook for our company in the UAE real estate market continues to be bullish and we are now embarking on a Rs 30,000 crores project comprising over 6 million square feet in creating a prime new city on the water.

Headline Gulf News – Corporate corruption probe widens

Dubai:

Housing mortgage company Tamweel on Tuesday found itself facing more scrutiny as it acknowledged that deputy group chief executive Abdullah Nasser Abdullah has been arrested by Dubai police in a corruption investigation.

Abdullah, who is also chief executive officer of Tamweel Properties & Investments LLC, a fully-owned Tamweel PJSC subsidiary focused on real estate investment and brokerage services, becomes the third official with Tamweel connections whose case has become public.
Last month police arrested Adel Al Shirawi, Tamweel’s former chief executive, and the company’s former head of investments, Feras Kalthoum, over financial embezzlement. Tamweel told the Dubai Financial market, where its shares are traded, that Abdullah “has been detained for questioning by Dubai government authorities in connection with an ongoing investigation.”

Tamweel did not provide information of the investigation saying it could “jeopardise” the ongoing case. Abdullah was arrested nearly a week ago over alleged swindling of money, Dubai Public Prosecution sources told Gulf News. “He has been detained since last week and is being questioned over alleged financial irregularities. He is facing alleged charges of embezzlement, swindling of money and of conning people,” said the source.

Sources close to the investigation said that one of the suspects who was arrested earlier in the same case reportedly accused Abdullah of being involved in the financial irregularities. It is alleged that his case involves between Dh40 million and Dh140 million. However, this information could not be confirmed by the Public Prosecution or police.

The news of arrest on Tuesday sent Tamweel’s shares lower. The stock closed 4.06 per cent down at Dh5.20.
The latest arrest highlights widening investigations into corporate corruption in Dubai’s booming real estate and financial sectors.

The Dubai government reiterated recently that it has zero tolerance towards corruption in the public and private sectors.

Dubai – Blind justice – Real Estate – ArabianBusiness.com

Blind justice – Real Estate – ArabianBusiness.com:

by Rob Corder August 2008

The rumours swirling around Dubai’s current high profile anti-corruption sweep are just that: rumours.For justice to be done, authorities must work through an exhaustive, multi-phase, multi-agency process that eventually punishes the guilty and clears the innocent.Phase one requires forensic examination of companies’ and individuals’ incomes, expenditures, balance sheets and assets.

Reliable sources have told Arabian Business that this process began as far back as 2004, and have been ongoing ever since through the office of Dubai’s Criminal Investigation Department (CID).
Nobody has been given immunity or preferential treatment according to their status, although investigations were rightly conducted discreetly and privately so that companies and individuals were not damaged at a stage when the law requires everybody to be judged innocent until proven guilty.

Investigations have thrown up several high profile names, but this does not make any of them guilty.

It is the job of Dubai prosecution officials to work with CID to draw together evidence that can be presented to the court.

Even those arrested within the past few weeks must face trial to establish to the satisfaction of the court that they have committed crimes and must be punished.
This is the phase that we are about to enter, and it is vital that it is carried out with the rigour and professionalism that the CID and prosecutors have applied so far.Corporate corruption crimes are notoriously difficult to bring to trial.

You only have to look at the investigations into arms sales to Saudi Arabia, which date back over 20 years without any resolution in sight, to see how complex the issues can be.But just because these trials will be difficult, and the complexity of evidence could lead them to taking years rather than weeks of month, the Dubai courts should not cut corners on the way to justice.
They must also show the same steely nerve demonstrated by police and prosecutors in assembling evidence against high profile individuals working for government-owned businesses.

Justice must be blind to those that it presides over.

Inevitably, deals will be done to speed up the legal process. Even judges must sometimes be pragmatic, and accept plea bargains that spare the court thousands of hours of torturous testimony in return for immediate guilty pleas.

Prosecutors, defence lawyers and judges should work together on these concessions.

This is dangerous territory.

Pragmatism is an acceptable part of justice, but it must not be used as a cover for capitulation.It is part of a defence lawyer’s toolkit to create as much complexity as possible on behalf of his clients – to make it look like a trial could be a massively expensive waste of everybody’s time.

Nobody yet knows which of the current crop of high profile defendants are innocent or guilty, and nobody should be hungry for instant justice. It would be a travesty if this long-running investigation – which aims to stamp out corruption and leave

Dubai with a gleaming reputation for probity – were to stumble during its trial and sentencing phase.

The public must be patient, and allow the justice system to follow up the excellent work of police and prosecutors.

It may take years before justice is finally seen to have been done, but the work will serve as a foundation for governance that should then survive for centuries.

As investigations into alleged corruption by senior Dubai executives move toward a possible conclusion this week, how quickly authorities act to strengthen and enforce property market regulation could help determine whether the wave of inquiries ultimately helps or hurts the emirate’s reputation.“

It’s crucial that these arrests are followed by decisive action to improve how the market is regulated,” said Nick Carnell, a partner at Kennedys, a law firm.

“The concern is that the arrests will affect confidence in the marketplace, which is inevitable. But if whatever follows instils a greater sense of transparency, along with a better approach to corporate governance and regulation, that will actually be positive in terms of market perception,” said Mr Carnell.
“Simply by regulating, you’re not necessarily going to stop corruption and dishonesty.”

The emirate has been hit by a series of arrests and investigations into some of the biggest players in the property market in the past few months, the latest being the arrest of four employees at Sama Dubai on allegations of bribery and mistrust.

The arrests came just one week after Nakheel confirmed that both an existing and former employee were being questioned over allegations of bribery. Two former executives at Tamweel, a local mortgage provider, are also being investigated for financial wrongdoing, while the former chief executive of Deyaar Development was arrested in April on charges of fraud.Many of the companies whose executives are being investigated are partly or completely controlled by the Government of Dubai. Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, has made clear the investigations are being supported at the highest levels of power. Dubai authorities have said the investigations, which had extended for much of the year, were nearly complete.

The probes come on the heels of some of the fastest growth in Dubai’s history, after the emirate began allowing foreigners to purchase property. Massive development projects followed, many of them overseen by Government-controlled companies such as Nakheel. Dubai’s regulatory infrastructure has struggled to keep up, although it has undergone rapid change as well.

Where the Dubai Land Department (DLD) once oversaw all regulatory aspects of the property market, other agencies such as the Real Estate Regulatory Authority (Rera) have been created to handle some tasks. Keeping tabs on the rapidly growing number of companies has been challenging.

“A lot of the issues this market has stem from the fact that there are many more big companies operating here now, and of different nationalities. We need more corporate governance,” said Marwan bin Ghalita, the chief executive of Rera. Mr Ghalita said Dubai had proven adept at responding to problems by crafting new regulation. “Whenever bad things happen here, the Government is very good at putting regulations in place.”

He said the wave of investigations had already led Rera to work more closely with the DLD to restore some of the former co-ordination that the department once had over the property industry. “When everything was in the hands of the Dubai Land Department, things were good – and everything will go back to [the DLD] system. I can assure you that the market will be good and stable.”

Gulfnews: Dynasty Zarooni gets clean chit

Dynasty Zarooni gets clean chit

By Saifur Rahman, Business Editor
Published: August 25, 2008, 23:12

Dubai:

Dynasty Al Zarooni Real Estate is considering legal action against some Indian publications and those behind an alleged ’smear campaign’ to malign its reputation, officials said.

The campaign has allegedly been launched by a former employee of Kabir Mulchandani, chairman of Dynasty Zarooni, who was fired for alleged ‘wrongdoing’, Gulf News has learnt.

Two Indian publications ran reports referring to some investors’ complaint that “he [Mulchandani] had misled them by showing a different property and selling them another”.

One of the reports said “Dubai’s Real Estate Regulatory Authority [Rera] is probing Mulchandani’s operations after nearly 30 NRIs from India, Russia and UK complained online”.

Dynasty Zarooni, formed in 2005, is a joint venture between Hilal Al Zarooni and Kabir Mulchandani. The company has been engaged in developing, buying and selling residential and commercial properties to wholesale investors and cashing in on soaring prices and growing demand that fetched solid returns.

“Dynasty Zarooni, having a real estate portfolio in excess of Dh20 billion, has been the target of a series of false accusations in relation to complaints from investors, with regards to their Ebony & Ivory project in Jumeirah Lakes Towers,” the company said in an e-mailed statement

The project is being developed by Al Fajer Properties, a leading property developer in the UAE, managed by its president Shaikh Maktoum Hasher Al Maktoum.

Over the past week there have been a number of internet blog stories and these culminating with a article in the Indian media, incorrectly quoting Rera officials, the company said.

The Ebony & Ivory development project is a Dh2.7 billion project, which was originally sold out within hours of its launch. “To date, the construction of all of the towers being developed by Al Fajer Properties is progressing rapidly,” the statement said.

Meanwhile, the Rera has given Dynasty Zarooni a clean chit.

“Dynasty Al Zarooni Real Estate has no violations relating to the registration of property brokers until August 25, 2008,” Rera said in a letter yesterday, a copy of which was obtained by Gulf News.

Hilal Al Zarooni, president of Dynasty Zarooni, told Gulf News, “We are pursuing legal action against those who are behind this campaign that is damaging our reputation.

“These imposters have not only targeted Dynasty Zarooni, but the UAE real estate market as a whole. The imposters should be brought to justice.” he said.

 

see also Video TV Agust 2008

http://www.zawya.com/video/default.cfm/sidVID20080826112123

Update: Dynasty Zarooni Jumeirah Lake Towers Plot H3 – G3 – Al Fajer Properties – original Comment at Skyscrapercity

original published: Skyscrapercity

http://www.skyscrapercity.com/showthread.php?p=24219792

FOR THE ATTENTION OF JUNIOR MEMBER : rohitd (aka: Rohit Dadakar)
The nature of the blog comments which you have posted regarding our company have been brought to my attention and I would like to very clearly, formally respond and clarify for the record each of your points to this audience.
The points you have made with reference to the Dynasty Zarooni Inc “Ebony & Ivory” development project located in Jumeriah Lake Towers, Dubai;UAE are incorrectly stated and for that matter I would like to clarify the actual facts pertaining to this project.

1. The “Ebony & Ivory” buildings were purchased by Dynasty Zarooni Inc from Al Fajer Properties LLC. The reference details of these projects are as follows:
Ivory 1 : Also known as Jumeriah Business Center – Plot G3-JBC8
Ivory2 : Also known as Jumeriah Business Center – Plot H1-JBC7
Ebony 1 : Also known as Jumeriah Business Center – Plot H3-JBC9

2. A 20% payment has been made to Al Fajer Properties LLC.

3. The project is Escrow compliant

4. This project has been sold onto Dynasty Zarooni Inc purchasers, who in turn, were assisted by Dynasty Zarooni Inc in the capacity of providing them with a 6 months time period to pay this 20% payment, without charge of any interest. Dynasty Zarooni Inc has already signed unit SPA’s (Sale & Purchase Agreement) with Al Fajer Properties LLC for every unit in the above aforementioned Towers. On receipt of this 20% payment, Dynasty Zarooni shall assign the unit SPA’s to the purchaser of the relevant unit.

5. With reference to the point relating to Area Differentials, it is clearly stated on the Dynasty Zarooni Inc Receipts’ provided to all purchasers, that a typical floor within this aforementioned Tower has the following clearly defined area designation:
Gross Area : 14,690 sq ft
Net Area : 11,314 sq ft
Thus, no purchaser of the Ebony1 (Project: H3-JBC9) will be surprised by this information as it remains entirely transparent to the purchaser throughout the purchase process.

Our records indicate that the blogger (rohitd – Member aka. Mr Rohit Dadakar.) is NOT a purchaser of any Ebony 1 unit in his own name (also known as Jumeriah Business Center – H3-JBC9 ) and thus the blog statement made by this person is wholly unfounded. We would ask Mr Rohit Dadakar to communicate his complete contact details, including passport details, correspondence information so that our Lawyers may take up this matter directly.

We would appreciate that any such queries regarding our companies projects be directed to us in the first instance and we would to happy to address any such genuine queries in order to avoid any misrepresentation in future being aired on the Internet in such blog channels, which are wholly incorrect in fact and furthermore clarify our companies’ standpoint. In future we would kindly request that the Moderator or Active Member within this on-line community, kindly verify that all facts are clearly confirmed in order to avoid future instances of erroneous statements.

N. Vishram
CEO
Dynasty Al Zarooni Real Estate LLC
Dubai; UAE

20th August 2008.

It’s going to be an uncomfortable summer for those without a clear conscience

original published Arabian Business
http://www.arabianbusiness.com/index.php?option=com_content&view=article&id=528460&newsletter=1

White-collar crime rarely captures the imagination as easily as its garden-variety counterparts.It seems you have to bring down a bank, hide billion-dollar losses or at least plunder a pension plan in order to secure column inches alongside the murder du jour.

Part of the reason is in the telling – after all, it’s unfortunately far easier to picture a grisly death, than it is to follow how the judicious use of special purpose entities might scupper a $111bn energy giant, or how one city whiz-kid with delusions of grandeur could blindside a 144 year-old Swiss bank with an alleged $75bn in unauthorised trades.

However, the summer of 2008 will be keenly remembered for a string of high-profile investigations into alleged financial irregularities by senior executives at both Dubai Government-owned and private entities.

If the public prosecutor’s suspicions are proved accurate, then His Highness Sheikh Mohammed Bin Rashid Al Maktoum’s drive for transparency – which is to be applauded – will have claimed its first scalps.

The summer of summonses began in April, and the announcement of probes into the activities of individuals at Dubai Islamic Bank (DIB) and its affiliate Deyaar.DIB’s former vice president for finance structure, Rifaat Othmani, was arrested as part of a fraud investigation on June 5. He and several other former members of DIB staff are being investigated, while the probe also led to the arrest of JPMorgan Chase’s senior country officer for the UAE, Omair Mooraj.At development firm Deyaar, meanwhile, four people have been arrested as part of a police investigation into alleged embezzlement.

Those hauled in include Deyaar’s former CEO, Zack Shahin, who has since maintained his innocence.Ever since the DIB and Deyaar investigations were made public, rumours have run rife that a host of other high-profile figures were also in the firing line. It has been a summer of ‘when’, not ‘if’, and so it came as no surprise when more arrests were announced last week.

First to be named was Adel Al Shirawi, the former CEO of mortgage giant Tamweel, and now vice chairman of state-owned Istithmar World PJSC. His former head of investments Feras Kalthoum is under the microscope too.

Down the road at Dubai Government-owned developer Nakheel, general manager of sales Walid Al Jaziri and former Nakheel executive Karim Masaad have also been arrested.

We can be sure that the public prosecutor’s office is not done yet. Amid tales of tender-rigging, bribery and profit skimming, the government is steadily making its way down a list of names, and circling those unable to balance the books or account for their lavish lifestyles.

This week, sources told Arabian Business that the CEOs of at least two other Dubai development majors – between them responsible for a completed project portfolio worth over $100bn – are currently the subject of CID probes.

It’s going to be an uncomfortable summer for those without a clear conscience.

Andrew White is the deputy editor of Arabian Business English

Whats going on with Projects Al Fajer Properties Jumeriah Lake Towers – Scandal ? – Dynasty Zarooni

posted to 7starsDubai by:

Rohit said…
I have recently bought an office in the ebony tower through dynasty zarooni.

They have been advertising heavily in Gulf News recently.

I want to warn all my fellow investors to beware of the contract that they are signing with DZ. If you check the website of Al fajer Properties, floor plans of their typical floors does not exceed 11,300 square feet, as per the spreadsheet attached to the MOU of sales between Dynasty & Al fajer where clearly sellable area has been mentioned. however Dynasty without any legal grounds and any such permission is adding 30% to the area and are currently selling and advertising even on the web for the floor area to be 14,664 sqft.

So on handover of the property the buyers will be in for a shock and dynasty is no where to take responsibility because they take their premiums out of the contract long before.

I have made enquiries neither the developer Al Fajer Properties nor DZ has an escrow account, please advise what legal action can I take at this stage?

Rohit said…
I recently booked an office with Dynasty Zarouni in the highly advertised Ebony Tower.

I have been baffled ever since I bought it because my office space as per my contract is 14,664 sq ft and I came across a shocking document of MoU signed between DZ and Al Fajer Properties along with the spreadsheet of sales and floor plans which clearly states the floor size to be 11,300 sq ft. This difference roughly amounts to be 30% and is an indigestible difference.

Transparent calculations have shown that DZ has already or in some cases is currently receiving premiums from the contract.

The part that sends a shiver down my spine is that DZ does not have an escrow account

With the kind of scams going around these days, I have a series of questions starting….1)

What happens if Al Fajer is telling the truth about the floor space and DZ isn’t2)

How do we get re imbursed… blah blah… especially if there is no escrow3)

Who is Hilal Zarouni and Kabir Moolchandani4)

Why is Gulf News mis representing the facts. Isnt it a very credible news source? 5)

What is the procedure for taking legal action! Alot of things don’t make sense here and I hope I can find some answersThere is a big “IF” attached to my presumably new office set up i.e if DZ is not a total hoaxIn one case, I m losing quite alot and in the second one I stand to lose everything.

Confusion!

13 August, 2008 10:38

read more:
http://dynastyzarooni.blogspot.com/

Another Post to 7starsDubai 21.August 2008

Comment:
Please check dynasty zarroni for me….I booked a masive office with them and all they do is make me run around…

I have paid my agent to get the story straight.
They published fake pictures in gulf news.

Please check my company’s blog listed below:

http://www.dynastyzarooniscam.wordpress.com/

I need help.

More informations also here:

http://www.skyscrapercity.com/showthread.php?t=290912&page=13

http://www.skyscrapercity.com/showthread.php?t=138300&page=3

http://www.skyscrapercity.com/showthread.php?t=139716&page=2

http://www.skyscrapercity.com/showthread.php?t=567903

 

It’s going to be an uncomfortable summer for those without a clear conscience

original published Arabian Business
http://www.arabianbusiness.com/index.php?option=com_content&view=article&id=528460&newsletter=1

White-collar crime rarely captures the imagination as easily as its garden-variety counterparts.It seems you have to bring down a bank, hide billion-dollar losses or at least plunder a pension plan in order to secure column inches alongside the murder du jour.

Part of the reason is in the telling – after all, it’s unfortunately far easier to picture a grisly death, than it is to follow how the judicious use of special purpose entities might scupper a $111bn energy giant, or how one city whiz-kid with delusions of grandeur could blindside a 144 year-old Swiss bank with an alleged $75bn in unauthorised trades.

However, the summer of 2008 will be keenly remembered for a string of high-profile investigations into alleged financial irregularities by senior executives at both Dubai Government-owned and private entities.

If the public prosecutor’s suspicions are proved accurate, then His Highness Sheikh Mohammed Bin Rashid Al Maktoum’s drive for transparency – which is to be applauded – will have claimed its first scalps.

The summer of summonses began in April, and the announcement of probes into the activities of individuals at Dubai Islamic Bank (DIB) and its affiliate Deyaar.DIB’s former vice president for finance structure, Rifaat Othmani, was arrested as part of a fraud investigation on June 5. He and several other former members of DIB staff are being investigated, while the probe also led to the arrest of JPMorgan Chase’s senior country officer for the UAE, Omair Mooraj.At development firm Deyaar, meanwhile, four people have been arrested as part of a police investigation into alleged embezzlement.

Those hauled in include Deyaar’s former CEO, Zack Shahin, who has since maintained his innocence.Ever since the DIB and Deyaar investigations were made public, rumours have run rife that a host of other high-profile figures were also in the firing line. It has been a summer of ‘when’, not ‘if’, and so it came as no surprise when more arrests were announced last week.

First to be named was Adel Al Shirawi, the former CEO of mortgage giant Tamweel, and now vice chairman of state-owned Istithmar World PJSC. His former head of investments Feras Kalthoum is under the microscope too.

Down the road at Dubai Government-owned developer Nakheel, general manager of sales Walid Al Jaziri and former Nakheel executive Karim Masaad have also been arrested.

We can be sure that the public prosecutor’s office is not done yet. Amid tales of tender-rigging, bribery and profit skimming, the government is steadily making its way down a list of names, and circling those unable to balance the books or account for their lavish lifestyles.

This week, sources told Arabian Business that the CEOs of at least two other Dubai development majors – between them responsible for a completed project portfolio worth over $100bn – are currently the subject of CID probes.

It’s going to be an uncomfortable summer for those without a clear conscience.

Andrew White is the deputy editor of Arabian Business English

Sama Dubai – Lagoons CEO Abdul Salam Al Marri faces corruption probe

21 August 2008Dubai:

Abdul Salam Al Marri, chief executive of the Lagoons – a project by Sama Dubai

Sama Dubai, a Dubai Government owned real estate developer, is facing probe, Gulf News has learnt.

“We just came to know that he has come under investigation,” a source close to Sama DubaiSama Dubai, said.

Sama DubaiSama Dubai’s flagship project, the Lagoons – on Dubai Creek has been delayed. The project is expected to house Dubai Towers, Dubai – the four towers at the core of its development.

The news comes amid a government crackdown on bribery and corruption – mostly in the real estate sector.

Police began the probe on three government officials on corruption. Market sources hinted that many more heads are expected to roll.

Dubai government, in a recent statement, has announced zero tolerence against corruption.
“The Government of Dubai will take strict and prompt action against all acts of corruption and bribery wherever they occur in the emirate, whether in the public of private sectors,” Dubai’s Public Prosecutor said in a recent statement.

By Saifur Rahman

Call for new laws to fight corruption – Sent Using Google Toolbar

Call for new laws to fight corruption

By Shuchita Kapur on Thursday, August 21, 2008 Financial experts are calling for stricter laws and regulatory policies to fight corruption following allegations of misconduct in Dubai property market. On Tuesday developer Nakheel confirmed a former employee was being questioned by the authorities over bribery claims. The statement followed media reports Karim Masaad, international sales manager for Nakheel, was being questioned by Dubai Public Prosecution as part of an anti-corruption crackdown. Last week Nakheel said one of its employees was being questioned on suspicion of taking bribes. This followed a report that Walid Al Jaziri, general manager for sales, was being investigated for financial irregularities. Laws are already in place to tackle corruption but more needs to be done, leading analysts told Emirates Business. And one analyst said adopting strict international standards would be a major first step. “I feel we should adopt international financial reporting Standards,” said Dr Nasser Al Saidi, chief economist at the Dubai International Financial Centre (DIFC). “This should be the standard for both listed and non-listed companies. It should be the rule for the corporate world. “In addition we should strengthen the listing requirements at stock exchanges – and this should apply not only to new entrants but to those already listed as well.” Niall O’Toole, a partner at the international law firm Clyde & Co, said a new law was needed. “There have been major scandals in the United States and throughout Europe and these led to changes in legislation and procedures,” he said. “The private sector in the UAE deserves a new companies law written to an international standard that would establish enhanced standards of corporate governance. “Insider trading is already against Emirates Securities and Commodities Authority [ESCA] regulations and we have seen examples of exchanges reversing trades. I would expect the three stock exchanges in the UAE to be very vigilant on this point and if changes are required to the regulations then I would expect these to be forthcoming,” he added. Dr Saidi said insider trading involving companies listed on the country’s bourses should be made a criminal offence. “There should be a criminal law for insider trading just as there is in developed markets,” he said. Dr Saidi said the ESCA had sufficient powers in terms of the current laws and regulations as well as the full support of the minister of economy. “Enforcement of the corporate governance code is very important. This was announced by the ESCA in 2006 and we should move towards it as early as possible to avoid such cases in the future.” A recent report on the way businesses are run said the ESCA should be more proactive in introducing new rules to strengthen corporate governance practices – a view shared by many experts. O’Toole said: “The UAE has no option but to continue to improve corporate governance standards. Both the ESCA and the Dubai Financial Services Authority have issued minimum codes of corporate governance for listed companies. “These need to be enforced both by regulators and by shareholders, particularly institutional investors. Consideration should also be given to adopting similar codes for private companies.” Sarmad Hasan Manto, Legal Consultant, United Trademark & Patent Services (UTPS), said: “It is necessary to promulgate laws and closely monitor activities through regulatory intervention. In addition the companies should also play a vital role through implementing the required levels of checks and balances.” Experts believe that a lack of transparency is a major issue in Dubai. The say regulatory intervention and compliance are needed to make sure the levels of disclosure are up to international standards. Amer Halawi, Head of Research at the National Investor, told Emirates Business: “The family structure of businesses in the UAE and the short history of the stock markets create a sense of secrecy. This results in companies communicating very little with their shareholders. “A case in point is the land deal that was struck by Emaar last year. It was advertised as an absolute winner by the company but very few valuation details were given. As a result shareholders were not able to gauge the importance of the deal and the stock went down on the news. “The deal eventually had to be cancelled. Since then Emaar has decided to appoint an investor relations officer to manage such situations better in the future. “One of the very first things UAE Inc should do is to impose a strict set of regulations to improve disclosure and transparency. Another important step would be to harmonise regulations across the emirates, particularly when it comes to listed companies,” Halawi added. Dr Saidi said: “Transparency and disclosure should be high on the agenda of a company. In most developed markets companies announce the date when they will publish their results in advance. However, within the region 90 per cent of the companies here do not do that. “This is important as the company will be obliged to stick to the deadlines. All companies should also have an investor relations department,” he said. Halawi said: “Everybody talks about the current allegations but no one really knows what is happening. This is a good example of poor communication. The market is wondering and, in the absence of answers, investors sell the stock. Crisis situations require excessive transparency.” However a spokesman for Nakheel told Emirates Business that transparency was at the heart of the company. “As has previously been advised Nakheel regularly conducts internal audits as part of its commitment to open and transparent corporate governance process,” he said. “As a result of this internal audit process the company can confirm that a former member of staff is also being interviewed by the authorities in relation to acceptance of inducements from third parties. No other staff members are being interviewed and it would be inappropriate to comment further on this issue.” Transparency will become even more important as Dubai develops further and more foreign money is invested in the emirate. Manto said: “In order to maintain and increase the volume of foreign investment it is essential that transparency and legal security is provided to stakeholders and their confidence is regained.” But O’Toole said transparency was just one of a number of factors and there was no single solution to the problem of corruption. “Transparency is certainly an important part of good corporate governance,” he said. “However, it is dangerous to think that there is a single or simple solution. Other elements of a potential solution would include an international standard companies law, continuously evolving codes of conduct, shareholder activism, suitable training for directors and officers and stiff penalties for breaches,” he added. Dubai move positive The declaration by Dubai of a zero-tolerance policy towards corruption has won the backing of financial experts. Public Prosecutor Esam Al Humaidan said: “Dubai Government follows a clear policy. There are strict directions to have zero tolerance towards all aspects of corruption, bribery and taking advantage of official positions.” Niall O’Toole, a partner at law firm Clyde & Co, said: “Corruption and scandals are a fact of life wherever you go. To suggest that the UAE is immune to this aspect of human nature would not be credible. The important thing is that the authorities do not overreact but rather react appropriately. Dubai Government making clear it has a zero-tolerance attitude to corruption is the right response.” Halawi said: “The fact that the government is talking about zero tolerance means there is a strong will to do things correctly. These situations are accidents along the way to economic growth and they have to be managed. The UAE has done a pretty good job so far.” Dr Nasser Al Saidi, chief economist at DIFC, believes the allegations will ultimately be good for business. “Even though it looks negative, it is good. People have faith in the system. The judiciary is holding people accountable for their actions. This will lead to an increase in investor confidence.” Sarmad Hasan Manto, legal consultant at UTPS, said: “The zero-tolerance policy is highly appreciated and has played an important role in building confidence among stakeholders.”

Sama Dubai – Lagoons CEO Abdul Salam Al Marri faces corruption probe

21 August 2008Dubai:

Abdul Salam Al Marri, chief executive of the Lagoons – a project by Sama Dubai

Sama Dubai, a Dubai Government owned real estate developer, is facing probe, Gulf News has learnt.

“We just came to know that he has come under investigation,” a source close to Sama DubaiSama Dubai, said.

Sama DubaiSama Dubai’s flagship project, the Lagoons – on Dubai Creek has been delayed. The project is expected to house Dubai Towers, Dubai – the four towers at the core of its development.

The news comes amid a government crackdown on bribery and corruption – mostly in the real estate sector.

Police began the probe on three government officials on corruption. Market sources hinted that many more heads are expected to roll.

Dubai government, in a recent statement, has announced zero tolerence against corruption.
“The Government of Dubai will take strict and prompt action against all acts of corruption and bribery wherever they occur in the emirate, whether in the public of private sectors,” Dubai’s Public Prosecutor said in a recent statement.

By Saifur Rahman

The UAE Real Estate "FLIPPERS" – Aldar clamps down on property ‘flipping’ – Real Estate – ArabianBusiness.com

Aldar clamps down on property ‘flipping’ – Real Estate – ArabianBusiness.com: “

Abu Dhabi’s largest real estate company is to become the latest developer to clamp down on the practice of ‘flipping’ by placing restrictions on the resale of its properties.

Aldar Properties CEO Ronald Barrott said in comments published on Tuesday that the developer will impose new rules on resales in its next phase of its properties coming online in October and November.

Barrott said these rules governing resale of its properties will become standard for all future projects.”

A degree of speculation can be good, but it needs to be tempered…

You can’t let the market get out of control, otherwise you have what is going on in Dubai,” Barrott told UAE daily The National.

“That is not a criticism, but there is overheating there. What you want is a market that moves quickly, but is sustainable.” Barrott would not reveal what measures Aldar plans to impose to dampen speculation other than that they will be “quite a new way of dealing with this issue”.

The announcement follows a similar move by Dubai-owned developer Nakheel, which said earlier this month that it was taking action to stop speculation on its Trump International Hotel & Tower, already the second most expensive in Dubai behind the Burj Dubai.The developer said investors in the Trump tower have to sign a purchase sale agreement banning them from on-selling the property for one year, adding that the clause could be extended to other projects in the future.

The practice of “flipping”, where investors buy property and then quickly sell it on at a higher price, has been blamed in part for the soaring price of real estate in the UAE.

House prices in Abu Dhabi rocketed by 61 percent between the fourth quarter of 2007 and the second quarter of this year, while in Dubai prices jumped 37 percent over the same period, HSBC said in a report in July.

Corruption, what corruption?

Corruption, what corruption? – Middle East Directory Zawya.com

There are generally three accepted kinds of corruption[1] that are standard in the world today, organised corruption which includes gangs and criminals, petty corruption which involves small amounts of money and business or political corruption which in the Gulf is yet to be officially recognised as a crime.

Some GCC countries have ranked quite well in the 2008 Transparency International survey, achieving scores that are not too far behind established democracies. In the latest report the GCC scores are Qatar 32^nd, the UAE 34^th, Bahrain 46^th, Oman 53^rd, Kuwait 60^th and Saudi Arabia as the 79^th least corrupt country[2]. Although it is not a surprise at first that the Gulf States with the highest rank in the list are Qatar and the UAE, what is a surprise is that they interestingly rank just after Israel (31^st). What is wrong with that you ask? Quite a bit in fact. Israel is a country that is currently investigating its head of government for the purchase of a house below market value[3], in the GCC buying a house at favourable terms is quite frankly an advantage if not a reason to enter government.

Silver lining

The two GCC countries that have stood out recently in fighting corruption are Bahrain and Kuwait, the ones with the only active parliaments in the GCC. Not many countries in the GCC are able or willing to do what Bahrain’s brave Crown Prince Sheikh Salman did recently. In the autumn of 2007 he launched an anti-corruption campaign that shook the Kingdom. Officials from Aluminium Bahrain, Gulf Air and Arab Ship Building have been questioned or referred to the public persecution for crimes from pocketing commissions to misappropriation of funds. Batelco, the island’s pioneering Telecom Company came under scrutiny after it was accused of paying US$30 million to secure a telecom firm in Jordan, not the first Bahraini firm to be accused of corruption there[4] (. Such incidents have irked the Crown Prince so much so that he deliberately, and uncharacteristically for the GCC, took the route of an open exchange of letters with his father the King in order to secure the necessary power to root out corruption from the highest echelons of government. The Crown Prince vowed that the campaigned will “not spare any minister implicated in corruption”[5]. The Prime Minister’s son, a close cousin of the Crown Prince, was ousted from his position of head of Bahrain’s Airport Authority not too long after the letters were exchanged[6]. Subsequently a new law was introduced that obliges most ministers in Bahrain to report directly to the Crown Prince’s Economic Development Board, thereby bypassing the office of the Prime Minister. Kuwait has also shown courage in the field of fighting graft when in September 2007 a court slapped a life sentence on a former Undersecretary of Defense and fined him a staggering $72 million for corruption[7].

The other GCC states

The Saudi press has not been able to publish some of the more important scandals in the Kingdom, instead there were reports of 500 petty bribery cases in Riyadh in 2007[8]. In the UAE, a professor of administration in the Emirates University stated that if such international surveys as the above were being held across the country and not only in Dubai then the UAE would not have ranked so well because “corruption in the other emirates is higher”[9] in addition to other unprintable serious allegations. In Qatar two Agriculture Ministry officials were charged with embezzlement of funds totaling US$270 million in 2005 to build private villas and a residential complex but not much has been heard since[10].

Why is this important?

According to Dr Ahmad Belhasa, Chairman of the UAE Contractors Association the real estate industry is most prone to corruption in the GCC as there is “no accountability and no punishments to companies or individuals involved in corruption.”[11] As the Gulf states proudly announces the Trillion Dollar mark in terms of construction deals is it not surprising that in the biggest economies of the GCC no one is brought to account, charged or even investigated?

I wonder what Transparency International says to that.

Postcrpit: Since writing this article for MoneyWorks magazine in early April Deyaar has had a run of not so good news. The CEO was held for days on end while the stock continued to trade. Investors were left in the dark whereas the stock should have been suspended from trading for a few days atleast. Fortunately, there was no panic selling, unfortunately, we still don’t know what is happening weeks after the incident.

---

[1] http://www.anticorruption.info/types_class.htm

[2] http://www.transparency.org/policy_research/surveys_indices/cpi/2007

[3] http://news.bbc.co.uk/2/hi/middle_east/6276071.stm

[4] http://www.arabtimesonline.com/client/pagesdetails.asp?nid=10629&ccid=12

[5] http://www.arabnews.com/?page=4&section=0&article=102299

[6] http://gulfnews.com/mobile/latest_news/10192151.html

[7] http://www.arabnews.com/?page=4&section=0&article=102299

[8] http://www.arabianbusiness.com/511762

[9]http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/theuae/2005/March/theuae_March909.xml&section=theuae

[10] http://english.aljazeera.net/English/archive/archive?ArchiveId=9876

[11] Ibid citation 8

Corruption in Dubai – UAE lawyers welcome move

UAE lawyers welcome move
By Abbas Al Lawati, Staff ReporterPublished: August 17, 2008, 23:21

Dubai:

UAE lawyers are welcoming the move by Dubai to crack down on financial corruption in the government and private sectors. But they say that the process should not stop until corruption is rooted out at all levels.

The media office for His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, issued a strongly-worded statement on Sunday, promising to deal harshly with any officials accused of taking payoffs in deals or those who exploit their positions for illegal financial gain.

Abdul Hamid Al Kumaiti of Al Kumaiti Advocates said the crackdown was no surprise because there had been talk of it recently, adding that it started a stage where every entity could come under scrutiny.

“Twenty to 25 per cent of the cost of government projects globally is believed to go to payoffs. This is prevalent in the UAE too,” he said.
Al Kumaiti said that under-the-table payoffs to get business deals approved had become so prevalent in the UAE that they were now considered a business norm. “Companies would either have to pay or withdraw their bids for contracts,” he said.

He blamed the phenomenon on multiple positions held by some officials in various government sectors, and he also cited the lack of a law forcing them to disclose their assets.

Asked if high-level corruption in government entities was a new phenomenon, Al Kumaiti said that the statement amounted to an admission of the existence of financial corruption in Dubai, “not an announcement about a [recent] discovery of financial corruption.”
Monitoring mechanism

He called for the setting up of a mechanism to monitor corruption and called for a law requiring high-ranking officials to disclose their assets, and be held accountable for corruption.

I brought this up with an official at a forum recently but my question was totally ignored,” he said.

UAE lawyer Yousuf Hammad said that all cases should be treated individually, but he nonetheless hailed the crackdown by the government. He noted, however, that requiring all officials to disclose their assets would amount to suspecting each of wrongdoing, which wasn’t the case.

Potential investors often come asking us if there are any effective anti-corruption laws,” Hammad said. I tell them there are, but they haven’t been [enforced].

The problem is that businessmen who deal with those asking for bribes feel pressured to pay and don’t notify the authorities.”

Corruption, what corruption?

Corruption, what corruption? – Middle East Directory Zawya.com

There are generally three accepted kinds of corruption[1] that are standard in the world today, organised corruption which includes gangs and criminals, petty corruption which involves small amounts of money and business or political corruption which in the Gulf is yet to be officially recognised as a crime.

Some GCC countries have ranked quite well in the 2008 Transparency International survey, achieving scores that are not too far behind established democracies. In the latest report the GCC scores are Qatar 32^nd, the UAE 34^th, Bahrain 46^th, Oman 53^rd, Kuwait 60^th and Saudi Arabia as the 79^th least corrupt country[2]. Although it is not a surprise at first that the Gulf States with the highest rank in the list are Qatar and the UAE, what is a surprise is that they interestingly rank just after Israel (31^st). What is wrong with that you ask? Quite a bit in fact. Israel is a country that is currently investigating its head of government for the purchase of a house below market value[3], in the GCC buying a house at favourable terms is quite frankly an advantage if not a reason to enter government.

Silver lining

The two GCC countries that have stood out recently in fighting corruption are Bahrain and Kuwait, the ones with the only active parliaments in the GCC. Not many countries in the GCC are able or willing to do what Bahrain’s brave Crown Prince Sheikh Salman did recently. In the autumn of 2007 he launched an anti-corruption campaign that shook the Kingdom. Officials from Aluminium Bahrain, Gulf Air and Arab Ship Building have been questioned or referred to the public persecution for crimes from pocketing commissions to misappropriation of funds. Batelco, the island’s pioneering Telecom Company came under scrutiny after it was accused of paying US$30 million to secure a telecom firm in Jordan, not the first Bahraini firm to be accused of corruption there[4] (. Such incidents have irked the Crown Prince so much so that he deliberately, and uncharacteristically for the GCC, took the route of an open exchange of letters with his father the King in order to secure the necessary power to root out corruption from the highest echelons of government. The Crown Prince vowed that the campaigned will “not spare any minister implicated in corruption”[5]. The Prime Minister’s son, a close cousin of the Crown Prince, was ousted from his position of head of Bahrain’s Airport Authority not too long after the letters were exchanged[6]. Subsequently a new law was introduced that obliges most ministers in Bahrain to report directly to the Crown Prince’s Economic Development Board, thereby bypassing the office of the Prime Minister. Kuwait has also shown courage in the field of fighting graft when in September 2007 a court slapped a life sentence on a former Undersecretary of Defense and fined him a staggering $72 million for corruption[7].

The other GCC states

The Saudi press has not been able to publish some of the more important scandals in the Kingdom, instead there were reports of 500 petty bribery cases in Riyadh in 2007[8]. In the UAE, a professor of administration in the Emirates University stated that if such international surveys as the above were being held across the country and not only in Dubai then the UAE would not have ranked so well because “corruption in the other emirates is higher”[9] in addition to other unprintable serious allegations. In Qatar two Agriculture Ministry officials were charged with embezzlement of funds totaling US$270 million in 2005 to build private villas and a residential complex but not much has been heard since[10].

Why is this important?

According to Dr Ahmad Belhasa, Chairman of the UAE Contractors Association the real estate industry is most prone to corruption in the GCC as there is “no accountability and no punishments to companies or individuals involved in corruption.”[11] As the Gulf states proudly announces the Trillion Dollar mark in terms of construction deals is it not surprising that in the biggest economies of the GCC no one is brought to account, charged or even investigated?

I wonder what Transparency International says to that.

Postcrpit: Since writing this article for MoneyWorks magazine in early April Deyaar has had a run of not so good news. The CEO was held for days on end while the stock continued to trade. Investors were left in the dark whereas the stock should have been suspended from trading for a few days atleast. Fortunately, there was no panic selling, unfortunately, we still don’t know what is happening weeks after the incident.

---

[1] http://www.anticorruption.info/types_class.htm

[2] http://www.transparency.org/policy_research/surveys_indices/cpi/2007

[3] http://news.bbc.co.uk/2/hi/middle_east/6276071.stm

[4] http://www.arabtimesonline.com/client/pagesdetails.asp?nid=10629&ccid=12

[5] http://www.arabnews.com/?page=4&section=0&article=102299

[6] http://gulfnews.com/mobile/latest_news/10192151.html

[7] http://www.arabnews.com/?page=4&section=0&article=102299

[8] http://www.arabianbusiness.com/511762

[9]http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/theuae/2005/March/theuae_March909.xml&section=theuae

[10] http://english.aljazeera.net/English/archive/archive?ArchiveId=9876

[11] Ibid citation 8

Corruption in Dubai – UAE lawyers welcome move

UAE lawyers welcome move
By Abbas Al Lawati, Staff ReporterPublished: August 17, 2008, 23:21

Dubai:

UAE lawyers are welcoming the move by Dubai to crack down on financial corruption in the government and private sectors. But they say that the process should not stop until corruption is rooted out at all levels.

The media office for His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, issued a strongly-worded statement on Sunday, promising to deal harshly with any officials accused of taking payoffs in deals or those who exploit their positions for illegal financial gain.

Abdul Hamid Al Kumaiti of Al Kumaiti Advocates said the crackdown was no surprise because there had been talk of it recently, adding that it started a stage where every entity could come under scrutiny.

“Twenty to 25 per cent of the cost of government projects globally is believed to go to payoffs. This is prevalent in the UAE too,” he said.
Al Kumaiti said that under-the-table payoffs to get business deals approved had become so prevalent in the UAE that they were now considered a business norm. “Companies would either have to pay or withdraw their bids for contracts,” he said.

He blamed the phenomenon on multiple positions held by some officials in various government sectors, and he also cited the lack of a law forcing them to disclose their assets.

Asked if high-level corruption in government entities was a new phenomenon, Al Kumaiti said that the statement amounted to an admission of the existence of financial corruption in Dubai, “not an announcement about a [recent] discovery of financial corruption.”
Monitoring mechanism

He called for the setting up of a mechanism to monitor corruption and called for a law requiring high-ranking officials to disclose their assets, and be held accountable for corruption.

I brought this up with an official at a forum recently but my question was totally ignored,” he said.

UAE lawyer Yousuf Hammad said that all cases should be treated individually, but he nonetheless hailed the crackdown by the government. He noted, however, that requiring all officials to disclose their assets would amount to suspecting each of wrongdoing, which wasn’t the case.

Potential investors often come asking us if there are any effective anti-corruption laws,” Hammad said. I tell them there are, but they haven’t been [enforced].

The problem is that businessmen who deal with those asking for bribes feel pressured to pay and don’t notify the authorities.”