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      Dubai property developer Damac said on Tuesday it had filed an international arbitration case against Egypt over a land dispute and the conviction of its chairman and owner, Hussain Sajwani.A Cairo court last week sentenced Sajwani in his absence to jail and ordered him to pay a $40.5 million fine in connection with his 2006 purchase of land at Egypt's […]
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Archive for July, 2009

Dubai Property Court – It´s Court Time

Posted by 7starsdubai on July 30, 2009

source Emirates Business

Abdul Qader Moosa, Chief Justice, Property Court, has said rights of real estate investors in Dubai are reserved under the laws enforced in the emirate.

He said Dubai has a specialised property court and advanced laws that go along with real estate developments and protect the rights of all parties of projects – investors, developers and contractors. Moosa told Emirates Business that Property Court judgments are more accurate and faster than those in many other Arab countries. This year the time a case takes at the Property Court of First Instance has gone down to 45 days from 57 in 2008.

Meanwhile, the time a case takes in the full [appeals] court has risen to 90 days in 2009 from 80 days last year because of the increase in the number of cases this year. It is a very short time in comparison with the years cases take in any other Arab country, he said.

A year has elapsed since the establishment of the Property Court. What are the court’s missions and achievements?

The court was established on June 15, 2008, by order of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. It was part of the establishment of several specialised courts with an economic nature. Sheikh Mohammed believed the economic activity and progress of Dubai required the establishment of such courts, which aimed at fast and cordial settlement of financial and economic disputes.

Three specialised courts were set up: commercial, civil and real estate. Now Dubai has six specialised courts of first instance, which also include the civil status, labour and criminal, in addition to the previously mentioned courts. The emirate’s court system had to be updated to go along with the development taking place at the economic level in terms of the volume of projects as well as the growing number of workers and employees.

Real estate cases are those related to disputes emerging from acts or transactions related to property or brokerage, except for rent cases that are exclusively handled by Dubai Municipality’s Rent Committee.

The partial [first instance] real estate cases cover disputes whose values do not exceed Dh100,000. Such cases are heard by a court presided over by one judge. Meanwhile, full [appeals] cases are concerned for disputes with a value of more than Dh100,000. They are heard by an appeals court with three judges. And, like other judicial disputes, each real estate dispute case is allowed three litigation degrees (first instance, appeals and cassation). Only cases with a value of no less than Dh200,000 can be heard by the Court of Cassation.

What are the most recurrent real estate cases heard by the Property Court?

The court hears various types of cases, such as those related to demands of contract termination, contract validation, writing and handover of contracts, in addition to brokerage cases.

For instance, in contract termination cases, one party asks for the termination of a contract on the basis that the second party has failed to abide by the contract’s conditions. A buyer might ask for contract termination for failure by the developer to abide by conditions such as the completion of the project as scheduled. And, if proved, the court has to order the termination of the contract and the return of instalments paid, plus the proper compensation.

What about the size of cases heard by the Property Court, the litigation time and the percentage of completion?

The Property Court of First Instance received some 12 cases in the last six months of 2008. Judgments were given in five cases. Hearings usually took three months. In the first six months of 2009 the court has received 50 cases, and 43 were decided. Hearings are still on in the remaining seven cases.

The appeals Property Court heard 137 cases during the last six months of 2008. Twenty were decided while the rest were deferred to the 2009 judicial season. Each case took three months. Meanwhile, in the first six months of this year, the court registered 883 new cases, giving a verdict in 168 over a period of three months.

What are the judicial departments affiliated to the Property Court?

The court has five judicial departments, including three full [appeals] departments, one partial [first instance] and one for the enforcement of judgments. The latter is presided over by a judge who enforces the judgments issued by notifying the parties concerned to act within 15 days or face legal measures such as seizing of bank accounts, property, cars or even stocks.

In the light of the relatively short age of the court, how useful is the Property Court for the real estate sector of Dubai?

The presence of specialised courts in any country helps boost the confidence of those dealing with the subject they speacialise in. And the reality is that the real estate sector has acquired a large percentage of the emirate’s economic activity. The presence of a specialised real estate court working according to the principles of “justice for all” and adopting accuracy and speed in the settlement of disputes contribute to making Dubai an important attraction for investors in the region’s real estate.

How has the real estate crisis reflected on the cases heard and the types of disputes?

For a start, one has to stress that the volume of cases heard does not reflect the developments under way in the real estate sector, since the court is relatively new. This is also because of the presence of other specialised bodies and institutions, such as the Land Department, the Real Estate Regulatory Agency, the Contractors Association and others. And with the start of the real estate crisis, we noticed a state of fear as investors were concerned about the money they injected in property. The launch of the court coincided with the start of the financial crisis late last year, and we used to receive many queries from investors. We were surprised with the many cases of contract termination with developers by investors who fear that projects may not start. In fact we used to reassure buyers that there was an escrow account in which went all the money paid by the buyer. We reassured them that there was no fear their rights would be lost. That period witnessed many contract termination cases for failing to pay instalments. However, the number of such cases was very small compared to the volume of the emirate’s real estate projects.

What are the challenges facing Dubai’s real estate sector now?

In the light of the volume of projects completed, as well as those under way, I believe the biggest challenge is the simultaneous development and updating of laws that regulate the sector to go along with the developments. And in the absence of co-ordination and co-operation between us and the Land Department and Rera, both strategic partners, we work to update our legislations and laws to suit the sector’s needs. Also, as a property court, we have made a strategy that aims to expedite and facilitate litigation, reactivate partnerships with the bodies concerned, and to pass accurate judgments, modernise and develop real estate legislations in the light of the cases we hear.

What about the currently enforced laws and legislations?

At present we work under a number of laws, legislations and bills, including Bill No85 of 2006 on the real estate broker register, which allows officially recognised brokers to practice. There is also Law No13 of 2008 on the primary real estate register, which regulates the registration of property between the parties, and it is mostly off-plan sales. This is in addition to Law No7 of 2006, which is related to the permanent real estate register and includes the registration of property after it is completed. There is the Property Registration Law No3 of 2006, which defines areas where non-UAE nationals can own property, and Law No8 of 2007, which obliges developers to open an escrow account for each project and where investors’ money is deposited. Each project has a separate account, and it is not allowed to seize another project’s account to collect debts due on the developer.

What advice would you give to real estate investors?

Before buying property, an investor has to make sure that the developer, broker and the project where he intends to buy, are registered. Many investors buy from non-registered brokers or developers, or buy property that is not registered with the Land Department. Also, they have to deposit their money in the escrow account of the project, which guarantees their rights in case of any dispute. They need to be aware of the laws that regulate the real estate sector and which are available on the website of the Property Court and the Rera.

PROFILE: Abdul Qader Moosa Chief Justice, Property Court

Abdul Qader Moosa holds a bachelor’s degree in law and the police sciences diploma from Dubai Police Academy. He graduated from the Police Academy in 1994 and served as Chairman of the Lawyers’ Committee. He obtained a diploma from Dubai Judicial Institute in 1998. He was appointed deputy public prosecutor in 1995 and public prosecutor in 1998. In 1999, he became a judge in the Court of First Instance. In 2005, he was promoted to a judge of the Appeals Court and was appointed the chief judge of the Court of First Instance in May the same year.

In September 2006, he became the chief judge of the Labour Court. Moosa has won several awards, including the Distinguished Judge Award under the Dubai Courts Excellence Awards.

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Prominent Emirati Businessman found dead in his car

Posted by 7starsdubai on July 29, 2009

source GulfNews

A prominent businessman was found dead in his car in the Al Butaina area of Sharjah early on Tuesday. Police suspect homicide.
Police said an Emirati in his early 60s was found dead in his four-wheel drive vehicle at around 6am.

Passers-by on their way to work spotted him.”The passers-by told Al Hira Police Station,” the police official said. “He was found with a bloated body.
Experts at the forensic laboratory are conducting an autopsy to find out the reason behind the death,” he said. The official added the man’s body was abnormally swollen but he did not seem to be wounded in any way.
“It could be poisoning or he could have been strangled,” police said.The man was a prominent businessman in Sharjah.

“We suspect a crime took place. It could be homicide,” police said.

“The man did not disappear from his home and his family did not report him missing,” the police official said.”We are investigating the death of the man. He ran a business here. According to initial investigations the man has no enemies.”Relatives of the victim are being questioned. The official said no one has been arrested in relation to the case.
The man was married and had a number of children.

Last week a Bangladeshi man was found stabbed to death in Sharjah and another Indian man was found murdered in the Umm Khanoor area.The Indian victim was found stabbed and had his legs bound.

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Dubai `s glitzy property market is in trouble – no doubt about that

Posted by 7starsdubai on July 29, 2009

Western investors fear Dubai`s Wild East reputation.

Dubai’s property market is in trouble, there’s no doubt about that. Just take a look at the hundreds of motionless cranes, unfinished projects and the expats who are leaving in droves as they lose their jobs.

And prices and rents which soared during a six-year boom have crashed since late last year. According to one resident who recently moved in the City, it now costs 150,000 dirhams to rent a three-bedroom flat on the Palm, a man-made island off the coast of the emirate, around the same it would have cost to rent a one-bedroom appartment there a year ago.

It’s not just the global downturn thats the concern for Dubai’s once-booming property market, but also the lack of transparency and need for greater regulation. And that’s what’s going to keep the western investor from splashing the cash.

Investors looking at Dubai’s real estate sector are a different breed. They are no longer looking to snap up properties in the hope of making a quick buck. They are more conservative with a longer term outlook.

“RERA (the Real Estate Regulatory Authority) has been trying to introduce regulation to minimise the impact of speculative investors,” said Andrew White, head of Middle East operations at UK-based investor Kenmore property Group.

“But some have said this is like shutting the stable door after the horse has bolted because the downturn has more or less wiped these out anyway.” So, a little too late perhaps ? And what about the recently announced planned merger of Emaar Properties, builder of the world’s tallest tower, with
three other local property firms?

Well, so far no one really knows. Simply put, there has been little in the way of information about this.

“If you look at Emaar and the potential merger, there is little financial clarity on how this will proceed and that is going to worry investors,” said Bobby Sarkar, analyst at Al Mal Capital. ”The U.S. and European markets have high levels of clarity in terms of regulation, but that isn’t the case here.”
There is no doubt however that the government is trying to improve regulation and transparency. Several wins for the property market over the last year include the introduction of a monthly rental index and new laws for property maintenance, not to forget the continuing effort to crack down on corruption.

But there is a long way to go and more is needed for Dubai to come close to rivalling mature markets such as the UK and U.S. which offer the longer-term investor the transparency they crave.

original source Reuters

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Damac Dubai – UK TV news investigation

Posted by 7starsdubai on July 29, 2009

Dubai – 29. July 2009

In a report broadcast Monday night in the UK, Channel 4 News spoke to unhappy British investors with property developer Damac who have yet to see a return on their money in the Dubai market.

While some wanted quick returns, others simply wanted an apartment in the sun – not least David Hunter of Oxfordshire who said he had handed over £60,000, so far, for an apartment at Damac’s Lotus development.

Hunter said a Damac representative told him at the time (February 2007) of purchase that construction on the development had already started.

Three months later Hunter found out otherwise when it emerged that the plot was occupied by a UNICEF building. Hunter not surprisingly said he ‘should have been told’.

Citing documents, Channel 4 claimed Damac had been selling developments off-plan without having title to the land in the first place – a practice outlawed by the Dubai Government last August.

Another document, dated from ‘late last year’ alleged that almost one quarter of the firm’s projects had been put on hold.

Meanwhile, a Harrow NW London resident who bought off-plan in the Flamingo Heights development 18 months ago, told the broadcaster he had paid three instalments totalling £70,000.

”I asked them in writing what the current state (of the development) was before I made my investment. I was assured that the foundations had been laid and construction was well under way at the site.”

With the Flamingo Heights development showing no evidence of construction when Channel 4 recently visited it Ludmila Yamalova of Al Sayyah Legal Consultants – to whom Channel 4 took the investor’s complaint – said he may have a case as a statement claiming foundations that had been laid when in fact they hadn’t, could amount to misrepresentation.

Erik Pekarski, former VP Customer Relations at Damac said the line being put out to customers was that ‘progress is ongoing, development is ongoing and construction is ongoing’.

Customers would continue to scream and yell at you as they should, because they had been put off for months, he added.

Damac has, in some cases, since offered alternative flats either complete, or near completion. However, many investors Channel 4 spoke to said they wanted their money back but, like the Harrow investor, had been informed by Damac that there is a ‘no refund’ policy.

When asked about the ‘no refund’ policy an unnamed former manager at Damac said the company took a tough line. David Hunter meanwhile says he has hired a lawyer.

In a statement to Channel 4 News the company confirmed it didn’t have a refund policy, except within ‘the provisions of the regulatory framework’.

It also denied any allegations of wrongdoing and said investors interviewed by the broadcaster were ‘not a representative group’. The company added that it had no intention or policy to mislead customers.

Addressing the allegation that the company had claimed foundations had been laid at the Flamingo Heights development when in fact they hadn’t Damac said: ”It is possible to have a rogue element who communicated information which was inaccurate and not endorsed.”

It added that the Flamingo Heights project tender is due to go out shortly.

source of this report Arabian Business

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Damac back in the Headlines – Stressed Investors from UK – A TV Report

Posted by 7starsdubai on July 28, 2009

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Al Fajer Properties project Dynasty Zarooni Scandal

Posted by 7starsdubai on July 24, 2009

Al Fajer Properties , HH Sheikh Maktoum Hasher Maktoum Al Maktoum

HH Sheikh Maktoum Hasher Maktoum Al Maktoum – Al Fajer Properties

Sheikh Maktoum Hasher Maktoum Al Maktoum is giving interviews about the sucess but a major real estate scandal is unfolding in Dubai as 500 angry unit buyers and investors in the $630 million Ebony Ivory Towers project demand a full government investigation of developer Al Fajer Properties and its agent Dynasty Zarooni Inc., according to Ebony Ivory Investors Group.”

source Financial Post

Misleading advertisements and press releases, overselling of non existing space and the missing down payments are among the buyers’ documented complaints, according to Moses Oye, a British investor and spokesperson for the Al Fajer Properties Investors Group having investors from US, UK, Russia, Iran, India, Canada & Pakistan.

“We are calling on Dubai’s Real Estate Regulatory Authority (RERA) and the Dubai Ruler’s Court to investigate the developer, cancel the Ebony Ivory project and compel a refund of our $140 million in down payments,” said Oye.
Oye cited a series of fake construction photographs that ran in a local newspaper in July 2008 with Al Fajer Properties logo. The photos showed a structure rising six floors above ground with the following caption: “Shot on location on 10th June 2008, Ebony Ivory, Jumeirah Lakes Towers.”

In reality, the photos were taken at another Al Fajer Properties  site and currently there is only a hole in the ground at the Ebony Ivory project, according to Oye.

“Had we known that Al Fajer Properties was presenting false and misleading photographs, we would never have invested in the development,” he said.
“In fact, some investors have already filed criminal cases for misrepresentation with the Dubai Public Prosecutor.”

In the past year, there has been virtually no construction on the site, said Oye. In addition, investors have learned that the developer sold approximately 250,000 square feet more space than the maximum built-up area allowed by government permit – another indicator of potential fraud selling air.

Most importantly, Al Fajer Properties paid Dynasty Zarooni Inc approximately $55 million of the $140 million collected in down payments that should have been deposited in an escrow account, Oye said. “We demand our money back and want to know why Al Fajer gave those funds to Dynasty Zarooni rather than use them for construction,” continued Oye.

“The law sets a punishment of imprisonment and fines for any person who embezzles payments made for the purpose of construction of real estate project.”

To date, RERA has ignored the investors’ demands of a transparent investigation and the evident violations of RERA regulations and UAE criminal laws in order to serve the interests of Sheikh Maktoum Bin Hasher Al Maktoum and Al Fajer Properties, said Oye.

“What do you do when the independent government agency trusted by the Ruler of Dubai to regulate and monitor the real estate developer’s performance actually participates in a cover-up operation that deprives investors of their rights?

What does that say to the world about the security of real estate investments in Dubai?

Where is the transparency and accountability Dubai Ruler ordered?

Are the laws not applicable when it comes to Sheikh Maktoum Bin Hasher Al Maktoum ?”

“Al Fajer Properties, which is controlled by Sheikh Hasher Maktoum from a ruling family using the government agency platform, continues to mislead the public about their non-existing construction with false reports as evident in their recent press release claiming 15% construction where in reality it is a deserted site with no construction at all.”

Summing up the case, Oye raised grave concerns about the recent threats some of the investors have received and quoted attorney Salim Al Shaali who represents plaintiffs in a criminal case against the Ebony Ivory sales agency for misrepresentation.

In a recent interview, Al Shaali said,

“We have full trust in Dubai justice system. I personally guarantee all investors that Dubai government will never allow a few individuals to abuse their social or official positions for illicit profits and damage the reputation of the brand Dubai as a safe and most secure investment hub in the region.

We are waiting for a reply from the prosecution’s office

original published see below

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Iranian’s lawsuit reveals royal power in Dubai

Posted by 7starsdubai on July 22, 2009

source World Tribune  09 June 2009

A  member of the royal family (Sheikh Maktoum Hasher Maktoum Al Maktoum)  in the United Arab Emirates has for the first time been sued by an Iranian executive on charges of fraud.

Shahram Abdullah Zadeh has sued the brother-in-law ( Sheikh Hasher Maktoum Al Maktoum) of the emir of Dubai ( Sheikh Mohammed bin Rashid Al Maktoum) in an unprecedented civil action in the UAE. The 37-year-old Iranian national has accused the brother-in-law, Hasher Maktoum Bin Juma’a Al Maktoum, of trying to take over Zadeh’s real estate firm.

“He thought he could do it all because he’s a sheik,” Zadeh said

Shahram Abdullah Zadeh CEO Al Fajer Properties 2008

Shahram Abdullah Zadeh CEO Al Fajer Properties 2008

The suit has challenged the transparency of the justice system of Dubai, which requires foreign investors to take on a UAE partner. Zadeh said he reverted to a civil action when prosecutors refused to file criminal charges against Hasher.

Zadeh, a life-long resident of Dubai, said he selected Hasher as the required UAE partner in Al Fajer Properties, established in 2004 and now worth $2 billion. Zadeh said he and Hasher fell into a dispute amid delays in building a billion-dollar office tower.

The economic downturn in the UAE has harmed a range of partnerships with foreign investors. In Dubai, the commercial capital, police have detained nearly 20 executives on suspicion of fraud. None of the detainees was connected to the ruling Al Maktoum family.

“There is no room for corruption and the corrupt,” Dubai ruler Mohammed bin Rashid Al Maktoum said. “In all corruption cases, people are not only prosecuted and punished, administrative and legal holes that they exploited to commit their crimes are plugged.No one in the emirates is above the law and accountability.”

Zadeh said Hasher Maktoum Al Maktoum, who ignored two summonses, exploited his connections to the ruling family to have the Iranian arrested. In February 2008, Zadeh was imprisoned for 60 days and pressed to renounce links to Al Fajer.

As Zadeh languished in prison, Hasher Maktoum Al Maktoum was said to have taken over Al Fajer and appointed his son chief executive officer. By the time, he was released, Zadeh found that his office safe was ransacked and cleansed of any documents that linked him to the company.

At one point, Zadeh appealed to Dubai’s emir. He said the emir did not respond to the complaint against his brother-in-law.

“We understand that Al Fajer Properties is controlled by a powerful member of Dubai’s ruling family,” Moses Oye, who represents investors in another Al Fajer project, said.

Still, Al Fajer continues to operate. On April 15, Al Fajer and the Dubai Real Estate Regulatory Agency, RERA Dubai,  announced the first transfer of property using a new official online system.

Sheikh Maktoum Hasher Maktoum Al Fajer Properties

Photo: Sheikh Maktoum Hasher Maktoum facing lawsuits from Investors of Ebony and Ivory Towers - also named Jumeirah Business Centre) developer in Dubai is Al Fajer Properties

Hasher’s son, Maktoum, was identified as president of Al Fajer.  Zadeh was not mentioned.

Foreign investors have demanded an investigation of another Al Fajer project, Ebony Ivory.

The investors, alleging fraud, have called on the Dubai Real Estate Regulatory Agency to force Al Fajer to issue a refund.

“We have paid approximately $140 million and have a signed contract from Sheikk Maktoum Hasher  Maktoum Al Maktoum,” Oye, who represents investors from Britain, Canada, India, Iran, Pakistan and the United States, said. “Now, we want our money back.”

Posted in Al Fajer Properties, Dubai, Jumeirah Business Centre, Shahram Abdullah Zadeh, Sheikh Maktoum Al Maktoum | Tagged: , , , , | 1 Comment »

From Sunday Times – Dubai – Construction halted, westerners jailed for adultery

Posted by 7starsdubai on July 20, 2009

source TimesOnline SundayTimes July, 2009

Andrew Blair says he will pick me up from outside my sleaze-bucket of a hotel, give it 20 minutes or so, got some work to finish off. He has a job again, contracts apparently “coming out of his ears”, which is good, because until recently he had earned a certain notoriety for not having a job and, more to the point, for the manner in which he went about finding a new one. He drove around Dubai, back in January this year, from the plug-ugly creek to the plug-ugly marina, in his white Porsche, with a sign in the back window saying he wanted a job; vroom vroom he went, gizza job. Scratch scratch scratch went the keys and coins along the side of his car whenever it was parked up.

Such conspicuous flaunting of vulgar affluence seems to me entirely appropriate for this foul city — especially when combined with an admission of desperation and hopelessness, that scrawled sign and telephone number in his rear window. Fur coat and no knickers, etc. But, unaccountably, the local expats found it all a little contemptible and the journalists — none of whom possessed Ferraris — sniggered long and loud in print, out of exquisite Schadenfreude. Just look at this idiot on his uppers, was the subtext. But the ploy worked, and Andrew is once again in gainful employment as a construction project manager, and therefore can remain in this country where they deport you if you’re skint, so who’s laughing now? Not Andrew, as it happens. The whole episode, he says, made him think, made him change his ways. Those first two years out here in this dusty and scorched semi-reclaimed desert were enormous fun: huge tax-free income, palatial apartment — “the crème de la crème” — silent or monosyllabic servants, all that sex (a city containing 8,000 air hostesses can’t be bad), the fast cars, the alcohol.

But he’s a changed man, he says; that epic, shallow, soul-destroying materialism and vulgarity now leave him cold. Being out of work for a while left him a little bruised but a better person, understanding that money and consumer durables are not everything. A changed man. Although not that changed, I notice, as the white Porsche pulls up.

“Why did you leave Britain?” I ask him, slung well below sea level in the bucket seat as we cruise the baked streets past the filthy, crumbling apartment blocks where the Bangladeshi slave labourers live or die, 10 or 12 to a room, and then into the hideous bling of downtown Dubai, a vast architectural experiment conducted by, seemingly, Albert Speer and Victoria Beckham. One skyscraper appears to be gilded in gold leaf, another looks like the birthday cake of a spoilt five-year-old brat — and all of them trying desperately to be taller, flashier, more grotesque than the one next door.

“Well, you know,” he says, in a soft Scottish burr, “I think it was the immigration more than anything else.”

“But Andrew, you’re an immigrant now…”

He looks astonished at this, as if the notion had never occurred, then says: “Yes! Ironic, I suppose. But the difference is, I’m a wanted immigrant.”

Well, up to a point, Lord Copper. Up to a point. In truth, needed more than wanted. As one local put it: “We are fed up of westerners who come here thinking they deserve an easy meal ticket. You were nothing in the West, so you came here for the houses and cars you could never get back home, you stole through taking out excessive finance that is not justified by you [sic] salaries. Then when you cannot pay you run, this is theft born out of greed and arrogance.

“Anyway despite all of this you still disrespect our cultural and religious values with your behaviour, dress and conduct in our malls and on our beaches and comments about us our race and our religion. You spend all your time critizising [sic] our laws, society and systems. Yet, you could never have the lifestyle you have here back in your system. You people are no longer welcome, please go and pollute somewhere else.”

That was the message posted by a disgruntled Emirati on an expat website recently, and, as a description of the British, South African, Australian and eastern-European workers now living in the United Arab Emirates (UAE), it has a certain truth about it. The Emiratis are a minority within their own country, the UAE, and an even smaller minority within Dubai, the most populous city of the UAE, where they number about 20% of the population.

On the other hand, it seems a bit rich coming from an Emirati, the inhabitant of a country that lucked into oil money about 43 years ago and is now utterly dependent on foreign labour for its current, unsustainable prosperity — the ranks of the skilled and talented working class from Europe, who come here and run their absurd, extravagant and now faltering construction projects, and the traders and the dealers.

The British expats I spoke to believed, without exception, that the Emiratis are utterly useless, corrupt and indolent, and, according to several, some British managers are leaving rather than abide by a new law that requires them to employ a certain percentage of Arabs on every job. They’re simply not up to it, they say. As it is, the locals make up less than one-fifth of the total UAE population, the westerners roughly half that amount. The majority population in Dubai is the criminally low-paid, enchained, abused, dispossessed peasantry from south Asia.

The Europeans work long hours, mind — you could not really call it an “easy meal ticket”: 12- and 14-hour days and not much in the way of holidays. But there was, until recently, an unspoken quid pro quo: listen, you soft, decadent westerners, you can have your salary income-tax-free, providing you don’t lose your job, obviously (in which case we’ll deport you and you’ll lose everything you own). You can have your big apartments, providing you don’t default on the payments when times are hard, in which case we’ll put you in prison — there ain’t no bankruptcy get-out clauses here, inshallah. Owing money to people is a crime. You can swan around in your flash cars and hang out at the malls, just as if you were in Maidstone or Cottbus or Pretoria. You can dress like you were at a stag-party pub crawl in Prague, or like an infidel whore on the make, and we’ll grit our teeth and smoke our hubba-bubba pipes and look the other way. You can even have that other stuff you seem to like so much, the relentless, enervating fornicating, the stuff Allah really dislikes; we will turn a blind eye to the legion upon legion of addled post-Soviet whores in your horrible Brit-style pubs, nightclubs and wine bars, the cheap babes from the ’stans. Just keep the money pouring in, please: keep building those gargantuan hotels and facilitating those loans for us.

But this long-standing deal may be in the process of disintegrating. The credit crunch hit Dubai badly, and it is clinging to its despised but less feckless neighbour, Abu Dhabi, for a very large bail-out. Troubled state-backed firms owe British companies more than £400m. The plush apartment complexes down at the marina are half-empty, investment has collapsed and property prices with it — house prices are down by as much as 50% and are predicted to fall by another 20%. It is almost impossible to put a precise figure on the rate of the collapse, because, according to one estate agent, there is no market. Nobody is buying, nobody is renting; there is no new business. An estimated £335 billion of projects have been halted or are on hold. And it is predicted that the population could decline by 17.1% by the end of the year, so things will not be getting better too quickly.

The depression in Dubai makes our own look like a vague afterthought, because nowhere else in the world was unregulated and unfettered capitalism and a belief in perpetually rising property prices embraced with quite so much ardour as here. And it seems, as a consequence, that since the crash the locals are in recriminatory mood: if you’re going to bring us a depression, they seem to be saying, then you can clear off and, in the meantime, behave like dignified human beings rather than dragging us down into your gutter. The sex thing has been bothering them particularly.

Mohammed is an Emirati who owns a big dive shop a hundred miles across the burning sand to the east of Dubai, at Khawr Fakkan, in the slightly more conservative province of Sharjah. Khawr Fakkan, circled by stark and beautiful mountains, is on the Gulf of Oman and there is good diving to be had, plenty of tourists. Mohammed is a divorcee and he employed young western babes and chicks to run his business, because working in a dive centre is a sort of halfway house between backpacking and the real world for a certain sort of young postgrad western chick. Roxanne Hillier worked for him: young, blonde, pretty and half South African, with an English dad called Freddie. Roxanne’s in the rather bleak Khawr Fakkan prison right now, and will be for the next few months, following an unsuccessful appeal against her sentence in late June. Would you like to hear what she did to get herself there?

It was about 2am when the old bill arrived. Mohammed had been filling up the 80 or so oxygen tanks he needed for the next morning’s dive; Roxanne had returned from the last dive of the day, helped out for a bit, then, exhausted, took a nap in an anteroom. Outside, Mohammed heard a disturbance, so he went down to check it out.

“It was local people, gathered around the door to the dive centre,” he told me. “They were angry, saying, ‘Who have you got in there? You’ve got a woman in there, haven’t you?’ I told them, ‘No, no, the dive centre is closed.’ They said to me, ‘Where is the key?’ Later the police arrived. I told them there was nobody there, but they took my key and opened the door and searched the place and that’s when they found Roxanne.” The two of them were carted off to Khawr Fakkan prison (separate cells, natch) and held on remand for a week until the case came to court. Did you have sex with Roxanne, I ask Mohammed. “No, no, no, never!” Did you kiss her? “No, of course not. It is not true. It is all a misunderstanding.”

Well, as regards the first denial, we don’t have to take Mohammed’s word for it, because the Sharjah judicial authorities were kind enough to check the whole business out for themselves. They stripped Roxanne Hillier bare and invaded her with swabs and scrapes; a little bit of Mohammed’s DNA found inside her would have hugely increased the eventual sentence. As it was, she received a sentence of three months for the crime of being alone in the same building as a man who was not her husband. She didn’t know this was the sentence, because the court proceedings were conducted in Arabic and therefore she could not put her case across, either. It was later they told her what had been decided. Mohammed got a couple of weeks on the same charge.

I take a cab to the beach, Jumeirah beach, and spend 3 minutes watching sarcomas grow on the semi-naked expats strung out across the sand under flimsy shades, E-number-flavoured Slush Puppies to hand, their eyes closed against the vicious glare, their bodies porky and immobile. It is 46C out here, unendurable — this is the country where you should never go outside. Thirty miles or so across the water is Iran, where they are probably not stripping off for the beach. Behind the beach is a dusty freeway and a hospital for people with bad kidneys. It was this beach upon which the British woman Michelle Palmer performed an ill-advised act of fellatio upon a chap she had just met — Vince Acors, from Bromley — and ended up doing three months in the local nick as a consequence. I just hope it was a shade cooler when Michelle went to work.

Vince did a lot of interviews bragging about the women he’d had sex with in Dubai when he got out. Reading the interviews, you feel Vince may have been the last person in the world you should ever give a blow job to on a beach. Or anywhere else, for that matter. Bromley say, or Downham.

Then there are the adultery cases that are stacking up. Such as Marnie Pearce, 40, sentenced to six months initially (three months plus a £600 fine and deportation after appeal) for an unproven adulterous relationship with a man she insists was just a friend: she was already separated from her husband. And the case of Sally Antia, whom the police swooped on as she emerged with a male friend from a Dubai hotel in the early hours of the morning — two months in prison reduced to six weeks on appeal. You get the feeling that the Emiratis are feeling vindictive right now.

Nor is it just sex: the Dubai authorities are getting a bit twitchy about all sorts of western behaviour when it impinges directly upon them. An Australian immigrant, Darren O’Mullane, had just finished a 14-hour shift as a nurse at a Dubai hospital and was driving home when he was badly cut up by another driver who swerved in front of him. When he finally overtook this clown, he — again, ill-advisedly, as it turned out — stuck one finger up in fury. Just one finger. Three weeks in prison, lost everything — house, car, the lot. He told me the whole process had been devastating, not least having to apologise to the idiot driver who was, as bad luck would have it, a UAE police official. “I am fed up with foreigners not respecting the rules and our culture,” the puffed-up medieval official told the local Arab media later. You can tell a lot about a country from a quick look at its policemen going about their business. In Dubai they appear strutting, arrogant and faintly ludicrous, the sort of policemen you might have seen in a pre-war Third World fascist theocracy. That is not too far removed from a description of Dubai today.

The Rattlesnake bar at the Metropolitan Hotel Dubai at 10pm, just before the Filipino dance band comes on, is the place to be; this is where the Islamic blind eye is at its most consciously, calculatedly, unseeing. The whores outnumber the punters by about two to one, and that’s only the lucky whores actually inside the place. There’s a phalanx of about 30 of them crowded just inside the door, just standing and watching, possessed of insufficient money to buy drinks. Another 40 or so are working the rooms, their buoyant pre-recession breasts rubbing up against some happy but bewildered surveyor from Daventry, or project manager from Glasgow, or engineer from Düsseldorf. Outside, 40 or 50 more sit at tables, or stroll arm in arm along the pathways, begging western men to take them inside. These girls are almost exclusively Russian — but not from Moscow or St Petersburg, or even Kiev. They are Russians from the de-Russified ’stans, drawn here by the lack of work for people of their ethnic origin in Almaty, Dushanbe, Tashkent, Samarkand. They are a remarkable phenomenon. I will bet that right now, in a village halfway up the Andes, or in a yurt just south of Ulan Bator, Mongolia, or somewhere down a long broad river in Sarawak, Borneo, Svetlana and Olga and Zinaida are sidling up to the local menfolk, offering them a bit of vigorous glasnost and perestroika for £30 an hour.

Iliana, a pretty chemical blonde in her twenties from Uzbekistan, is telling me who she would deign to sleep with for money. “English, good. Scottish, better. Irish, good. German, okay. But no f***ing blacks and no f***ing Arabs.” No locals? “Arabs?” she asks, outraged. “No Arabs.”

“What if they paid you 20,000 dirhams [nearly £3,500]?”

“Oh, well, then, yes, sure,” she says, laughing.

None of the Russian girls will sleep with black people or Arabs, not even Luba from Turkmenistan, who is a little older and a little brighter and a little more circumspect. There were lots of West African girls in this bar not so long ago, but the Russkies forced them out. The refusal to have anything to do with the Emiratis is not confined to the sex workers: every taxi driver I spoke to — almost all of them Pakistani — said they would refuse to pick up an Arab. Why? “Because they are arrogant scum,” one driver told me. Nobody wants anything to do with the Emiratis.

Luba worked in a travel agency in Bishkek in Kyrgyzstan, but the money was appalling and she needed to put her son through university, so she came here. As we talk I notice her still working, trying, over my shoulder, to catch the eye of someone who might actually pay her for her time. She hates her work — most of the girls hate their work — but not Iliana. “I like f***ing men,” she says cheerfully, and disappears, presumably to meet a client. Luba looks like she will not be so lucky tonight, which is a shame, because I like her, although she’s quite fervently racist, as they all are. As everyone here in Dubai is, here in this lovely little melting pot, all these races gathered together, loathing one another.

At midnight I make to leave but am stopped by Keri, who is a very attractive young lady from Almaty in Kazakhstan. She hangs onto my jacket because she has found something very attractive to admire in me, too. This is gratifying, if you’re me. “So lovely, so lovely,” she says, holding the thing in her hands, turning it over and over, “I haven’t seen one like it.”

I blush a little and clear my throat.

“Um, it’s a Bic,” I tell her.

“Bic? What is this Bic?” she says shaking her pretty head, still stroking it.

“A lighter. Its name is, you know, Bic. I think they’re, er, French.”

“Aah,” she says, kohl-heavy eyes flashing. “So you have been to France, yes?”

“No — I mean, yes, um, I’ve been to France. But you can get these lighters in England too!”

“Really?” She says, entranced.

“Er, yes. In Sainsbury’s. Or a corner shop. For about 70 pence.”

I give her the lighter and skedaddle, back to my hotel room. She is less pleased with the lighter now that she possesses it.

My interview at the Islamic Information Center is a brief, uncomfortable experience, albeit conducted with exquisite politeness and civility (on their part, at least). This is a propaganda arm of the government, or more properly a state-run evangelistic Islamic operation aimed at westerners, situated in a lock-up shop in a frowzy sector of downtown Dubai. What happens is this:

I sip water (they were out of beer) and ask a question like — hey, have you seen all those whores down at the Rattlesnake? Isn’t that against the law? And then the five berobed interviewees talk among themselves at great length in Arabic and eventually one of them explains to me very courteously, with a shy smile and an apology, why they won’t answer the question. Not their responsibility, you see. This happens seven or eight times, and eventually the interview is terminated. After many handshakes I am sent on my way with a copy of a little book about how Jesus Christ was quite a nice man but totally useless, if we’re being honest. One of the men, Wael Osman, sort of agrees that the economic downturn has made relations between Emiratis and their western Gastarbeiter a little more tingly, a little more fraught, and concurred that while the government turned a blind eye to all sorts of westerner shenanigans, this was becoming harder to do of late. But when I say “agrees” and “concurred”, I mean that I said this stuff and he smiled a little and in a very vague sort of way nodded his head. The man I should be speaking to was the chief of police, they said, but sadly he was away receiving a medal in Djibouti.

I didn’t really have a chance to get on to the main topic, the stuff about Dubai that really, truly offends — and indeed should offend Islamic sensibilities. I don’t mean Luba and Iliana, although the traffic in Russian prostitutes is brutal and violent. I don’t mean the westerners in their Porsches, or the authoritarian nature of this place and complete and utter lack of democracy, or the vile architecture and unbounded materialism, or the prosecution of women for the crime of standing near men. I don’t even mean the mass rounding-up and prosecution of homosexuals, who are summarily imprisoned and — the government has suggested — may face hormone treatment in order to make them, uh, “better”; this is a Sodom where sodomy carries a 10-year stretch. All of that stuff makes Dubai a fairly foul place to be, but compared to Dubai’s real crimes, they are as nothing.

Maz, a Pakistani from Lahore, drives a taxi for a living (he won’t pick up Emiratis, of course). He lives in a room in the grim suburb of Al Quoz, a room costing £700 a month that he shares with six other Pakistanis. His passport has been taken from him in case he nicks the car he is driving. He cannot get home, he hasn’t the money or, indeed, the passport. Maz, though, is one of the lucky ones, very near the top of the hierarchy of Third World workers induced to come to this country by the promise of large wages — wages that are rarely forthcoming. Maz at least gets paid, even if all the money goes on rent.

The bar staff are also near the top of this hierarchy. Mostly Roman Catholic Goans, they get looked after by the hotels and even get a chance to visit their families once a year or so. I spoke to one barman to glean a bit more detail about his living conditions, but an Emirati overseer barked something out and the man ceased talking to me. But at least the hotels provide their staff with accommodation, even if it is in dormitories.

t is the construction workers, the labourers — the Bangladeshis, the Tamils, the Filipinos, the Somalians, the Chinese — who are the real scandal of Dubai. Hundreds of thousands of them lured again by the promise of large wages, stripped of their passports, their contracts rarely honoured — some have gone months without being paid, some have even paid just to be there. They cannot go home. They hunker down in cramped, squalid apartments in Sonapur and Al Quoz. This is Dubai as a slave state. There were serious riots recently in the Chinese quarter: the workers finally had enough of criminally low wages — 500 dirhams, or about £83 a month — and continual mistreatment. The Chinese embassy got involved. Worse still are the conditions of the south-Asian workers, the construction men and the maids, effectively imprisoned in this country, abused by their employers, scrabbling around in sometimes 50C heat to earn enough to pay the rent on their shared accommodation. The Indians rioted too last year, but were forced back to work by water cannon. In the year 2005 alone, the Indian consulate estimated that 971 of its nationals died in Dubai, from construction site accidents, heat exhaustion and — increasingly — suicide. The figure for suicides the next year alone was more than 100. The Emiratis were, to give them credit, appalled by this figure, so they asked the consulate to stop collating the statistics. In October 2007 a construction-work strike resulted in 4,000 migrant workers being flung in jail and then deported. In 2006 the campaigning charity Human Rights Watch detailed the “serious” abuses of workers’ rights — the wages withheld, the high rates of injury and death with “little assurance” of medical care, the passports confiscated, the wages either criminally low or never paid. The UAE had done “little or nothing” to address the problem. You get the picture?

Local human-rights activists, when they raise their concerns, tend to receive a visit from the secret police; some have had their rights to practise as lawyers stripped from them.

Andrew Blair, he of the Porsche, is a project manager for construction work. He believes the condition of the labourers is appalling, unforgivable, almost beyond belief. I suggest to him that in his position, he could ensure that the contracts went out to firms that treated their workers fairly. He thinks about this for a moment. “Um, well I don’t care about it that much,” he says.

He is not a bad person, Andrew, and my suggestion is probably a little naive. He is, at least, conflicted. He acknowledges the issue and can comprehend that it is an evil. But that’s what you sign up to when you buy property in Dubai, or go there to work, or to stay in one of its bling hotels. You sign up to all that stuff you condone it.

I can’t tell you how much I enjoyed my taxi ride back to the airport with Tariq, the taxi driver from Peshawar (he won’t pick up Emiratis); to see that towering skyscape left behind in a cloud of desert dust. Paris Hilton had just flown in to do something pointless in a mall. When that happens, you just have to get the hell out.

where the money comes from

GDP in 2007: £23 billion

Trading: 31%

Construction/ Real estate: 22.6%

Financial Services: 11%

Oil/Petrol/Gas: 5.8%

Dubai’s foreign debt is well over 100% of its GDP

Annual incomes

Project manager, Construction: £57,576

Project manager, IT: £38,438

IT manager: £33,891

Construction worker: ± £993

Politics and human rights

1 No suffrage

2 Political parties illegal

3 Freedom of association and expression curtailed

The UAE refuses to sign the following treaties:

4 International Covenant on Civil and Political Rights

5 International Covenant on Economic, Social and Cultural Rights

6 Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families

7 Convention against Torture

Crime and punishment

8 Death penalty by firing squad for several offences

9 Death penalty by stoning for adultery

The people

Population (Inc Migrants)

Male 75.5%

Female 24.5%

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Dubai Property Market – Flippers, skippers, runners, survivors battle it out

Posted by 7starsdubai on July 19, 2009

source PropertyWeekly

‘Flipping’, ‘skipping’ and ‘running’ are relatively new terms in the argot of Dubai’s property market. Many would know about at least one person who has done one of the three ‘disrespectful’ things, and may even be aware of several more via the city’s thriving rumour mill.

The residents who remain also have a new nomenclature for themselves — the ‘survivors’.

New players experiment with speculation

Flipping was hitherto the activity of buying and selling property instantly, and solely for instant profit. Despite the impression that this dangerous game is a thing of yore and was once the exclusive prerogative of high risk takers, it is not, and has attracted new players.

Flipping was once restricted to incomplete properties, but they are now doing it with credit notes. Also, flippers are not necessarily risk takers; some are trying to recover investments gone awry, while others are desperate for much needed cash.

Offloading multiple units

AR is a classic flipper. In December 2007, he owned three apartments — on paper — at various buildings in Dubai Marina. By September 2008, he had sold two for a cumulative profit of Dh1.23 million, despite the fact that both were not ready for occupation.

“I am lucky that I disposed them of before it was time to start paying my mortgages and before the economic downturn,” he says. “If things get bad, I will move into the one I still own, so no money lost. But, many other people who acted impulsively have done badly. I know some really sad stories and consider myself blessed.”

However, despite his narrow escape from steep losses, AR cannot shed his innate instincts. When questioned, he admits that he has purchased a credit note for 60 per cent of its face value, and is looking for a buyer who will take it off him for a profit.

Skippers caved in

Skippers are other risk takers like AR, but who didn’t have the sense, instincts, or gumption to offload their properties when the market soured. When they could not find buyers and saw alarming drops in prices, they caved.

Faced with the prospect of bounced cheques, rising debts and the threat of unemployment, some of these foolhardy investors just upped and left, or skipped.

Skippers are not available for quotes, but TQ who left the country in the first week of February is believed to have invested in no less than six properties across the country. A feat made possible by two facts: he was the creative director of an advertising agency and had a substantial salary, and he dealt with an Islamic bank that allows customers to have multiple mortgages.

Coincidentally, the day he lost his job is also the day he realised that the next set of payments towards his property portfolio totalled Dh246,000, and also, that there were no prospects of serious buyers on the anvil, for any of them.

Forfeiting down payments

His simple solution was to forfeit the nominal down payments he had made on the said properties, and to head back to his native country to sit out the storm. In his case, he paid off his credit cards, cleared his lesser debts, and told his bank that he was giving up his claim on the many apartments he owned.

Trail of debts

Runners, on the other hand, don’t bother doing any of the latter or the formalities associated with relocating from the country. One minute they are in Dubai, revelling in their enviable status as the owners of several properties, and the next minute, they are simply missing from the country, with only the trail of debts proving they lived here. They could now be anywhere.

Finally, those who have heard the horror stories and heaved heavy sighs say they too need a moniker for not falling into any of the above categories.

Ordinary residents who continue to pay rent on their homes, have strongly resisted the urge to invest in property. Those who actually live in the properties they purchased say they are just holding tight.

BJ owns a modest studio flat at The Greens and his brother MJ rents a one-bedroom apartment at Dubai Marina, and by their own admission, they worry about the appalling state of the world, just as much as they are alarmed about their own job security… or the possible lack of it.

According to MJ, their mission is to put away and save as much money as they can every month just so that they are not taken unawares by any unpleasant surprises — be it falling prices, increased rents, unexpected payments or unplanned debts.

“All those people we hear about have titles that classify them into categories. We believe that the rest of us who live in Dubai and eke out an everyday existence without running, skipping or flipping need one too. Just call us the ‘survivors’,” say the brothers.

And they are not being sardonic.

Flippers now deal in credit notes

• Despite the impression that flipping is a thing of yore and was once the exclusive prerogative of high risk takers, it has attracted new players
• Flipping was once restricted to incomplete properties, but they are now doing it with credit notes
• Also, flippers are not necessarily risk takers; some are trying to recover investments gone awry, while others are desperate for much needed cash
• Skippers are other risk takers, but who didn’t have the sense, instincts, or gumption to offload their properties when the market soured
• Runners simply go missing from the country, leaving behind a huge trail of debts

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Al Fajer Properties Case – Zadeh says he’s a victim of a system in which the rulers can manipulate police and the courts to protect their business

Posted by 7starsdubai on July 19, 2009

Al Fajer Properties Dubai 2009 , Sheikh Maktoum Hasher Maktoum Al Maktoum

In this Gulf city-state, two things have long been untouchable: business interests and the ruling family. However, an attempt to sue a member of the family over an alleged financial swindle is a sign of how much the economic crisis has rattled business as usual here.

Shahram Abdullah Zadeh accuses the brother-in-law , sheikh Hasher Maktoum Al Maktoum, of Dubai’s emir illegally of taking over his real-estate firm Al Fajer Properties and having him detained by police to help the swindle.

Zadeh, a 37-year-old Iranian national who has lived in Dubai all his life, brought a civil case against the brother-in-law and his son Sheikh Maktoum Hasher Maktoum Al Maktoum to get his firm Al Fajer Properties back, a rare move. Even more surprising, shrahm Zadeh tried to raise criminal charges, but that step went nowhere because prosecutors rejected it.

The case has raised questions about whether Dubai really is what it claims to be: A boomtown where international businessmen can safely invest and turn a profit; or rather, a nest of cronyism and connections where royal blood can still trump entrepreneurial effort.

Such questions were largely ignored by everyone – businessmen and politicians alike – as long as the cash was rolling in during Dubai’s stunning expansion over the past decade. But now the emirate has hit the skids in the world financial crisis.

“During the boom, Dubai’s shortcomings were glossed over, but now that the economy is struggling, it’s becoming a different story,” said Christopher Davidson, an author of two books on the United Arab Emirates and a lecturer at Durham University in Britain.

Dubai’s emir, Sheik Mohammed bin Rashid Al Maktoum, led the emirate’s vast financial ambitions. But business ran far ahead of the effort to modernize legislation in what remains a traditional Arab monarchy, where the ruler and his family hold final say.

Now the government has been trying to rein in some fast-and-loose business practices. About a dozen former executives are in custody for various investigations. Some have close ties to the government, but none of those in custody are related to the ruling family.

Zadeh’s case goes farther – breaking to taboo of questioning Dubai’s leadership. Zadeh says he’s a victim of a system in which the rulers can manipulate police and the courts to protect their business.

“If Dubai cannot provide security for foreign investors, they might as well switch off all the lights,” he said.

Attempts over the past weeks by The Associated Press to contact the brother-in-law, Sheikh Hasher Maktoum bin Juma’a Al Maktoum, were unsuccessful. Hasher Maktoum Al Maktoumand his company attorneys did not return repeated phone calls or respond to interview requests.

In the first session of Zadeh’s civil case, Hasher Maktoum Al Maktoum and his lawyers failed to appear. In the second a week ago, his lawyer asked the court for more time to study the allegations. The case is to resume May 4.

Zadeh and the Sheikh Maktoum Hasher Al Maktoum went into business in 2004. Foreigners are allowed to deal in property only after finding an Emirati sponsor to officially register a company. The usual practice is for the Emirati sponsor to give his signature for an annual fee or profit share. Several members of the sprawling ruling family are involved in such deals.

Zadeh set up a firm, Al Fajer Properties, and was chief executive while Sheikh  Hasher Maktoum Al Maktoum held the trade license. The firm was profitable and is now worth about $2 billion, according to Zadeh. But the partnership soured over delays in building a commercial tower, Juemirah Business Centre.

Zadeh said in an affidavit to Dubai’s attorney general that he was arrested in February 2008 and held for 60 days. He says he was never charged with any crime but was questioned over his business – including the combination of his safe.

While Zadeh was in detention, Sheikh Hasher Maktoum Al Maktoum took over the company Al Fajer Properties by appointing his son Sheik Maktoum Hasher Maktoum Al Maktoum as chief executive, ousting Zadeh, according to Zadeh’s filing. When he was released, Zadeh says he found his office safe had been cleaned of documents showing he was the owner of Al Fajer Properties and Hasher Maktoum Al Maktoums partner.

Zadeh also says police tried to push him to sign a document saying he had no connection to Al Fajer Properties. He submitted to the court

Al Fajer documents listing him as CEO and transactions that his lawyers contend show he was the sole investor. The Associated Press was given a copy.

Sheikh Hasher Maktoum Al Maktoum  “thought he could do it all because he’s a Sheik,” Zadeh said.

Police refused to comment on whether Zadeh was detained. Shahram Zadeh says they continue to hold his passport and so far he has had little luck pushing his claims.

He submitted a criminal complaint but the attorney general refused to investigate, giving no reason.

Zadeh then filed a complaint directly to Dubai’s emir, who holds what is called the Ruler’s Court. Residents can bring to the emir what they believe are injustices unaddressed by the courts – from disputes over money to wrongful deaths.

Zadeh says he has received no response.

see also: Terahn Times

More: Al Fajer Properties DubaiJumeirah Business CentreEbony Ivory Towers Dubai

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Don`t kiss your girlfriend in a Dubai Taxi !

Posted by 7starsdubai on July 19, 2009

source GulfNews

Dubai: An Arab man is in police custody and could face deportation after being accused of kissing his girlfriend while they were both in a taxi in Dubai, Police told Gulf News.

A police source from Al Rifaa police station said that the Lebanese businessman working in Dubai, was arrested by Criminal and Investigation police officials recently while he was accompanying his Ukrainian girlfriend in a taxi.

The man – in his late thirties – is being detained at Al Rifa’a police station. He was later transferred to Al Aweer central jail.

The man said he was leaving a hotel in Dubai’s Al Rifaa area with his girlfriend. They were sitting next to each other in the taxi. “We took a taxi and I was sitting next to my girlfriend. I was leaning at her showing her a video clip on my mobile phone,” he said.

He said that after a few minutes the taxi was stopped by undercover police. “We were asked to leave the taxi. They asked me why I was kissing her in public. They said this is not allowed here,” he said.

The man said he and his girlfriend were arrested and taken to Al Rifa’a police station.

Police said that the man and his girlfriend have been arrested for committing an indecent gesture in public.

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RERA Dubai has designated 69 proptery projects

Posted by 7starsdubai on July 17, 2009

The Real Estate Regulatory Agency has been surveying every project in Dubai with an engineer who photographs the site and gives the official state of construction. Until recently, none of these projects were designated as stalled.

Now, Rera has designated 69 projects out of 407 surveyed (so far) as “on hold”, or about 17 per cent.

Two developers, in particular, are responsible for many of these: Abyaar Real Estate Development and Al Mazaya Holding, both from Kuwait.

Abyaar has put on hold 46 groups of villas in its Acacia Avenues project in Al Sofouh alone, as well as its Pier 18 project in Dubai Marina, its Olgana tower in Al Sofouh, and its Hiliana tower in Al Sofouh. That amounts to 49 projects, according to Rera’s survey

Al Mazaya has delayed 14 of its clusters of buildings in its Q Point development in Dubailand.

Other stalled projects include Damac Development’s Admiral Bay in Maritime City; Dheeraj & East Coast LLC’s Bay Residences in Business Bay; Marina Crown Real Estate’s The Vantage in the Dubai Waterfront; the RUFI Heaven in International City; and the RUFI Luxury Heights in the Dubai Waterfront.

Most of these projects are from smaller developers, so it’s most likely just the tip of the iceberg when it comes to delay.

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Real estate brokerages ignore Rera regulations on advertising

Posted by 7starsdubai on July 15, 2009

source Business24/7

Most of the real estate brokerage companies in Dubai are ignoring Real Estate Regulatory Agency’s (Rera) rules when it comes to newspaper advertising.

A search of newspaper listings shows that even some of the top brokerage companies don’t mention their Rera registration numbers, leave alone mentioning the trust account number for off-plan properties or title deed number for completed properties.

Rera regulations state that when a real estate brokerage company advertises “off-plan” properties, the advertisements must mention the project name, the trust account number and the broker office registration number. And for completed properties, they need to mention the title deed number and the broker office registration number in the advertisements.

“If brokerage companies fail to comply with the advertisement guidelines mentioned above, we send a notice to them through the Department of Economic Deve-lopment (DED) asking them to comply with our guidelines. If any company fails to comply with our guidelines, we issue penalty through the DED and take legal action,” a senior agency official said.

This newspaper has reported about Rera’s recommendation that people should only use service of Rera-registered brokers. They should also check the broker’s Rera accreditation at the agency’s website (www.rpdubai.com) before dealing with them.

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Insolvency and company bankrutcy in Dubai

Posted by 7starsdubai on July 15, 2009

source GulfNews

Dubai: Personal insolvency and companies’ bankruptcy have become major issues since last September when the impact of the global recession became evident in the UAE.

Colonel Khalil Ebrahim Al Mansouri of Dubai Police told Gulf News: “We are very strict against bounced cheque cases, but before taking any legal action, we give the cheque issuers a chance to reach a compromise with the second party before filing a formal case. If the settlement can’t be reached the complaint will be registered as a case and transferred to public prosecution and later to court.”

Al Mansouri pointed out that high profile individuals and those running big businesses are not sent to jail immediately even if they are caught up in bounced cheque cases involving big amounts.

“What we usually do is set them free after they sign an undertaking leaving their passport [until] they can pay back their debt. However, people who fail to settle their financial commitments will be sent to jail to protect the rights of the affected parties,” he said.

With the number of cases of bounced cheques increasing, Minister of Justice Dr Hadef Bin Jua’an Al Daheri earlier told Gulf News that the UAE government is reviewing a proposal to deal with them out of court.

Al Daheri said: “The government is currently reviewing a proposal to set up a centre to handle bounced cheque cases before referring them to court.”

Such a centre, he said, will reduce the burden on the courts by minimising the cases referred to them. In the first three months of 2009, police recorded a total of 11,440 bounced cheques, against 6,462 in the same period in 2008.

As part of their ongoing efforts to combat the issuing of cheques that are likely to bounce, the Dubai police have signed a data-sharing agreement with Emcredit, an entity that is developing a credit database of people and companies.

The database will help financial institutions to assess the credit risk of an individual or a company.

Lenders can check an applicant’s credit history to see if they have bad records, and also detect if they have defaulted cheques and if there is an available balance for any cheque.

The verification process can be done in seconds, but not all banks are Emcredit subscribers. The police are currently providing Emcredit with the names of people who have been involved in bounced cheque cases.

Dubai Police are also planning to establish electronic links with bank settlement sections in Dubai to help them track data about bounced cheques fast.

The links will also facilitate complaint-filing against the cheque issuer without the complainant having to go to a police station. An electronic form with all data required about the bounced cheque is filled in and then automatically sent to one of Dubai’s police stations to be recorded as an official complaint. The applicants are not obliged to go to police except to sign the formal complaint before it is sent to the prosecution.

Read also: The cost of bounced cheques and Bad cheque offences should be considered individually

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UAE pledges fair trial of royal Sheikh Issa bin Zayed Al Nahyan on torture claims

Posted by 7starsdubai on July 15, 2009

source Zawya

ABU DHABI, July, 2009 (AFP)

The Abu Dhabi prosecution service on Monday pledged an “impartial trial” of torture allegations against a brother of the United Arab Emirates president.

“The overriding principle of these investigations is the protection of law, guaranteeing a fair and impartial trial for all persons involved,” an unidentified prosecution official told WAM state news agency.

Sheikh Issa bin Zayed al-Nahayan has reportedly been put under house arrest and is barred from leaving the country pending investigations into video footage aired by US television network ABC on April 22 which appeared to show the prince mercilessly torturing a man.

“The investigation is being carried out with full transparency and according to the principle that all are treated equally before the law,” said the official.

“The lawyer representing Sheikh Issa bin Zayed, Mr. Habib al-Mulla, is following the investigation,” WAM added.

The Abu Dhabi prosecutors’ office is “carrying out its investigation and engaging with those involved in the case in order to reach a clear understanding of all the pertinent aspects and circumstances,” the official said.

In the video, Sheikh Issa, a brother of UAE president and Abu Dhabi emir Sheikh Khalifa bin Zayed al-Nahayan, appears to beat a man with whips, electric cattle prods and a wooden plank with protruding nails.

Assisted by police, he is seen to pour salt in the man’s wounds and run over him with a sports utility vehicle.

The victim, who needed months of hospital care, was reportedly an Afghan trader who lost a load of grain worth 5,000 dollars.

Other allegations of torture by the prince have since emerged.

Lawyer Anthony Buzbee, representing a former business associate of the prince who also alleges he was tortured by him, wrote to the UAE authorities on May 2 that he had “more than two hours of video footage showing Sheikh Issa’s involvement in the torture of more than 25 people.”

The Texas-based Buzbee acts for Texas businessman Bassam Nabulsi who smuggled out the original footage aired by ABC.

Human Rights Watch called on the UAE government to establish an independent body with authority to inquire more broadly into the prevalence of abuse and torture by UAE police, and to ratify the Convention against Torture.

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ACI Real Estate Dubai: Nakheel hits back at ACI Waterfront claims

Posted by 7starsdubai on July 14, 2009

source Arabian Business

Master developer Nakheel on Monday hit back at claims made by Dubai property group ACI Real Estate – and insisted its Waterfront mega-project was going ahead.
Robin Lohmann, managing director of ACI Real Estate, in an interview with Arabian Business this week, blamed the state-owned developer for a lack of progress on his flagship Ferretti Luxury Beach Residence and Pershing Luxury Beach Residence projects, located in the Madinat Al Arab area of the Nakheel’s Waterfront development in Jebel Ali.

“We have invested in several plots in Dubai Waterfront. We need to know from the master developer of Waterfront, which is Nakheel, if they plan to go ahead with the project now or not. Once we have these answers we can give to answers our purchasers,” Lohmann said.

But in an emailed statement to Arabian Business Nakheel said it had handed over ACI’s two plots and the company was free to start construction.

“The two plots which ACI own at Madinat Al Arab have already been handed over,” a spokesman for Nakheel said.
“Waterfront has not been cancelled. Our current focus at Waterfront is on Badrah, Veneto, and Madinat Al Arab. Work continues to make good progress at these sites,” the spokesman added.

The Madinat Al Arab phase of the Waterfront is due for completion in 2015. Other sub-developers such as Plus Properties have started construction at Madinat on its Pixel Tower and Wave Residence projects.
“At Madinat Al Arab, we remain committed to providing infrastructure to third party developers as per their Sales and Purchase Agreements. The majority of plots in this phase have been handed over with some third party developers already mobilised on-site,” the Nakheel spokesman added.
Dubai-based property developer and investment company ACI Real Estate, is a division ACI (Alternative Capital Invest) Group, a German firm with interests in asset management and real estate.

The Waterfront is a planned seaside mega project, twice the size of Hong Kong. It is being built over six phases and completion dates range from 2010 to 2018.

Nakheel said in December the Madinat Al Arab, Veneto, Badra and Canal District phases of the Waterfront were pressing ahead, while other sections would be delayed in the wake of the global crisis.

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German Developer ACI Dubai verzettelt sich in Dubai – Financial Times Germany

Posted by 7starsdubai on July 10, 2009

source Financial Times

Prominente verkauften ihre Namen für Bauvorhaben in Dubai – jetzt gerät das Projekt zum Skandal. Es geht um geplatzte Immobilienspekulationen, neue Identitäten in Panama – und für Anleger um 600 Mio. Euro.

Promis sind gut. Promis ziehen immer. Daher erblickte, wer vor zwei Jahren ins glamouröse Dubai reiste, überall Plakate eines Projektentwicklers aus dem nicht ganz so glamourösen Gütersloh. Sein Name: Alternative Capital Invest (ACI). Selbst Wolkenkratzer waren mit Riesenpostern bedeckt, die mit den Konterfeis von Promis wie Michael Schumacher, Boris Becker und Niki Lauda für Türme warben, die deren Namen trugen. “Man dachte, die ganze Stadt gehört ACI”, erinnert sich Lothar H.

Der Geschäftsmann hat Strafanzeige gegen ACI-Chef Robin Lohmann gestellt. Für ihn geht es um 150.000 Euro. “Lohmann ist ein Betrüger”, sagt H. Mit der These ist er nicht alleine.

Rund 600 Mio. Euro will ACI von insgesamt 8.000 Anlegern für Projekte im Scheichtum eingesammelt haben. Doch an den Baustellen stehen die Kräne still, zugesagte Auszahlungen fließen nicht. ACI beschwichtigt – und schießt gegen Kritiker zurück: Man sei Opfer von Internet-Stalking, es liefen Rufmordkampagnen. Nutzer von Finanzforen stießen kritische Recherchen an – und behaupten: Die Chefs von ACI sollen versucht haben, für 750.000 Euro die Flucht aus Dubai nach Panama vorzubereiten, unter fremder Identität. ACI dementiert das. Anlegerschützer sind dennoch alarmiert: “Wir befürchten das Schlimmste”, sagt Claudia Lunderstedt-Georgi vom Deutschen Verbraucherschutzring.
Dass es für das Geschäftmodell von Lohmann schwierig ist, liegt auf der Hand. Die Immobilienpreise haben sich in Dubai seit ihrem Hoch halbiert, die Analysten der Deutschen Bank rechnen mit einem weiteren Preisverfall um 20 Prozent. Der Preissturz brach vor allem den so genannten “Flippern” das Genick, den Spekulanten, die Immobilien erwerben und sofort weiterverkaufen. In Boomzeiten brachte das sichere Gewinne: In den USA wie auch in Dubai wechselten Immobilien bis zu zehn Mal zwischen den Flippern, ehe sich der erste Baukran drehte. Bricht der Markt jedoch ein, sitzen die Flipper auf Objekten, die sie nicht wollen. Oder nicht zahlen können.

Den “Master of Flipping” nennen Immobilien-Insider Lohmann im Wüstenemirat. Doch es hat sich ausgeflippert. Ohne Extrakugel. “Hier gibt es leere Häuser und Büros ohne Ende”, sagt Esther Stimmler vom Deutschen Wirtschaftskreis in Dubai. Auch ACI-Projekte sind so ins Schlingern geraten. Bei der Auszahlung der Anleger von vier Fonds gebe es “Verzögerungen”, gesteht ACI auf seiner Homepage ein, das Kapital sei nur noch “weitestgehend gesichert”. Es geht zunächst “nur” um 54 Mio. Euro. Schuld sind die Anderen: Ein Käufer von ACI-Bauten könne angeblich nicht zahlen. Während FTD-Anfragen in den ACI-Büros in Gütersloh und Dubai unbeantwortet bleiben, meldete sich Robin Lohmann am Donnerstag auf der Online-Plattform “Arabian Business” mit den Worten: “Geld zurück ist derzeit keine Option”.

Jetzt fahnden mehrere Anwaltsbüros nach geprellten ACI-Investoren. Anwalt Jens-Peter Gieschen aus Bremen, hat nach eigenen Angaben zehn Mandanten gewonnen. “Nach unseren Informationen sind auch bei Projekten, die Investoren als Sicherheit dienen sollen, die Bautätigkeiten inzwischen weitgehend eingestellt”, sagt Gieschen. Auch einstige Vertriebspartner des Fonds haben sich von ACI distanziert. Man sehe “dringenden Handlungsbedarf”, heißt es in einem Schreiben, dass der FTD vorliegt. Sie haben ein Kontrollgremium eingerichtet und fordern eine Gesellschafterversammlung der Fonds.

Der Berliner Anwalt Sven Tintemann will die prominenten Zugvögel, die die Immobilien bewarben, zur Verantwortung ziehen. Er bastelt nun an einer Klage gegen Schumi, Becker und Lauda.

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Troubled German Developer ACI puts Dubai Waterfront Towers on hold

Posted by 7starsdubai on July 9, 2009

source The National

Alternative Capital Invest (ACI) Real Estate, the troubled German-owned developer behind projects such as the Boris Becker, Michael Schumacher and Niki Lauda towers, says it will put on hold its developments on the Dubai Waterfront and shift investor holdings to other assets.

Affected projects include the Ferretti and Pershing towers, which have yet to begin construction. The company said it would shift client’s investments in these developments to its towers in Business Bay, which consist mainly of the towers linked to prominent German sport figures. The Becker, Schumacher and Lauda towers are currently under construction but running significantly behind schedule.

In recent weeks a group of German investors in ACI-linked funds, which have financed the developments, complained that the developers have missed payout deadlines. The postponement of the Dubai Waterfront towers comes as ACI is struggling to maintain investor funding that it needs to complete existing projects.

Robin Lohmann, the managing director of ACI Dubai, said in a recent interview slowing payment was having an impact on construction schedules.

“All our sites [in Business Bay] are under construction,” he said. “But since there are delays in people’s payments, we have had to slow down in order to deal with it. If nobody pays, the risk is that construction stops. This is the last thing that we want.”

He added that of the 11 projects the company had underway, at least seven were under construction.

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Dubai Police Nab Real Estate Agent on the Run

Posted by 7starsdubai on July 8, 2009

source KhaleejTimes

DUBAI — A real estate agent, on the run for
nearly a month, was caught by Dubai Police for allegedly issuing dud cheques worth Dh203 million to high
end clients.

Ahmed Thani bin Ghalita, Director of the anti-crime department of Dubai Police said, about 39 people, including top soccer players, had lodged complaints against the man, a British citizen of Pakistani origin.

Ghalita s
id the complainants alleged that the man had sold them property, for which they gave deposits, and when the deals fell through, the deposits were not repaid as guaranteed. “The police received information that the suspect, who is a holder of a British pa
sport, was trying to escape from the UAE. The police launched a search for the suspect who worked as a real estate broker and who was wanted by Interpol for issuing dud cheques to clients, including soccer players of various teams,” he said.

he police was informed by employees that the suspect was not living with his children and that he changes his appearance and was not using his mobile phone to avoid being caught by
the police.

“The suspect was stunned when he was arrested by the police in a coffee shop in the Murraqabat area — he thought that the police would not recognise him. The suspect has been on the run for 25 days.”

Ghalita said the suspect, using his work in the real estate company, dealt with clients through the email and online resources so as to avoid providing evidence for an office or home address.

Ghalita would not say which company the man was working for or which property or properties he claimed to be a broker for.

The department of anti-crime, established by the Dubai Police on September 2008, has approved a number of ways to curb crime, including the investigation of bounced cheques of large sums.

It was a part of this initiative that Dubai Police tracked the 39 complaints issued at various police stations, investigated and arrested the man for issuing bounced cheques worth Dh203 million.

During the first half of the current year the police recovered thousands of dirhams by investigating on dud cheque cases and arrested 278 wanted people.

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Dubai Property Developer Al Barakah chief arrested on bouncing cheque charges

Posted by 7starsdubai on July 8, 2009

source The National

The chief executive of the property developer Al Barakah is in custody, and is likely to face charges relating to the signing cheques worth millions of dirhams, which later allegedly bounced.

SIK, whose company was planning what would have been the tallest tower in Ajman, surrendered himself to the Dubai police last Thursday and was officially arrested on Sunday, according to the public prosecutor’s office of the Muraqqabat police station.
“He has been captured on Sunday this week,” said a first sergeant at the public prosecutor’s office. “He said that his name has been blocked and that he can’t leave. He told that his business had [gone] worse and that he wanted to solve everything by the court. And because of that he surrendered himself.”

According to the officer, the charges related to a bounced cheque. “He had one bounced cheque of nearly Dh10m and the case has been sent yesterday to the court,” he said.

The chief executive was being sought by Dubai Police for more than seven months for allegedly bouncing cheques that totaled more than Dh40 million (US$16.33m), according to the Dubai police.

Al Barakah, which launched a dozen projects in Dubai and Ajman from 2007, found itself in difficulty last year.

SIK signed agreements with investors promising to buy back their properties after six months with a guaranteed 50 per cent profit on the downpayment. He issued post-dated checks as a guarantee of the buy-back.

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ACI Real Estate Dubai Update: ACI Owner ordered new identities in Panama

Posted by 7starsdubai on July 6, 2009

source 06. July 2009

ACI owner Uwe Lohmann (64) and his son Robin (34) shall have offered 750.000 Euros down payment in cash to an international offshore and consulting provider in Panama – to receive two new identities in South America!?!

The consultants should also care for a secure domicile abroad with protection against extradition – as well as for bodyguards as company for both German “businessmen”. Robin Lohmann shall also have transferred huge amounts to Bahrain, further funds shall be deposited in Panama and Belize.

What the Lohmann family did not consider with their supposed flee preparations: The consultant which has been contacted by them, is also correspondent of the Financial Intelligence and News Service http://www.gomopa.net.

Father and son Lohmann planned and launched in Dubai commercial and residential tower projects, accumulating 300 Million Euros from more than 8.000 German investors, at least in the same amount from Off-Plan unit buyers in Dubai and further 500 Million Euros from UAE banks. Parts of their projects have been branded with the names of celebrities like Boris Becker, Michael Schumacher and Niki Lauda. Meanwhile, Robin Lohmann was forced to deposit his passport at Dubai authorities and has to show up frequently at police and public prosecution in Dubai. His management team under Indian Sanjay Chimnani already left the country.

In spite of several trials, none of the Lohmanns was available for statements. For journalist colleagues from ArabianBusiness as well as GoMoPa and others, Robin Lohmann was not reachable – neither in person, nor via phone.

Under these conditions, it seems to be just a matter of time till the former “CEO of the year” will be brought into custody.

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Property Prices Dubai will fall further

Posted by 7starsdubai on July 6, 2009

Source Arabian Business  05 July 2009

More than 60 percent of people think UAE property prices are going to drop by another 20-30 percent this year, according to an online poll.

Arabian Business asked its readers whether they thought the real estate market had hit the bottom, with just 5 percent in agreement.

Instead, some 63.4 percent of people thought there was still another 20-30 percent correction to come.

House prices in Dubai have tumbled 50 percent from their peak during the fourth quarter of last year.

Problems of over-supply and population shrinkage, with thousands of jobless expatriates expected to return home now schools have broken up, will mean continued pressure on prices.

The poll results provide a rather more pessimistic view of the UAE real estate market than a recent Shuaa Capital survey into investor confidence.

The Dubai-based investment bank found that 19 percent of investors believed that the market had bottomed out.

The investor confidence survey, conducted between June 13 and 16, is the only one of its kind in the region. It also found the highest increase in investor confidence, rising 16.8 points to 123.8 points on the month.

However, the Arabian Business poll found that only 6.1 percent of people were optimistic, believing that the market was now on the road to recovery.

While, 25.6 percent played it safe, saying nothing was going to change until the end of the year.

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ACI Group denies CEO Robin Lohmann has been jailed, fled UAE

Posted by 7starsdubai on July 2, 2009

source Arabian Business

UAE-based real estate broker ACI Group has denied stories in German business media that the company’s CEO Robin Lohmann has been jailed.

Trade title Financial Intelligence Service last week reported that Lohmann has been under investigation by the Dubai police.

The paper stated that four independent sources had confirmed Lohmann had been taken into custody for one night, had surrendered his passport to the authorities, and was not allowed to leave the country before the debts of ACI Dubai were settled.

Real estate companies have been battered by the collapse in property prices in the UAE, which has led to several master developments grinding to a standstill.

Sub developers with projects within these master developments have been battling to satisfy investors who have paid deposits for property that is not currently being built, while struggling to pay contractors on jobs that are ongoing.

Last week a senior executive of Khoie Properties, the developer behind a $550 million project on Ras al Khaimah’s man-made island of Al Marjan, was handed a three year jail sentence for bouncing two cheques totalling over $30 million.

An official from ACI, who spoke exclusively to Arabian Business but would not be named or directly quoted, said that reports in the German business press about Lohmann’s arrest, and rumours circulating in the Gulf that he had fled the country, were not true.

ACI Group is a German-based company that entered the Gulf market in 2004 with a multi-million dollar marketing programme for a succession of projects and established a glamorous headquarters – a large converted beach villa that overlooks the Arabian Gulf.

High profile projects in the emirate included tie-ups with F1 racing legend Michael Schumacher and former Wimbledon tennis champion Boris Becker.

The office is still functioning, as Arabian Business discovered when it visited the premises last week. Mr Lohmann was not available for a meeting and has not returned our calls.

A company spokesman mounted a robust defence for ACI, noting that, unlike many other developers who had already fled the country, ACI was still operating and construction work was ongoing. The company’s web site, he said, showed pictures of ongoing construction work that proved work is progressing.

There are 19 projects promoted on the web site, but only seven have “construction updates” that show progress on building sites.

The remainder, which includes the Boris Becker Beach Resort & Tennis Academy in Ras Al Khaimah, have no construction updates on the web site.

ACI said that no refunds were being paid to investors because projects have been postponed, not cancelled, but added that investors were not required to pay additional instalments until construction work restarted.

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ACI Real Estate Dubai – ACI Funds Germany and Austria – Investors in Becker, Lauda and Schumacher Towers demand refund

Posted by 7starsdubai on July 2, 2009

source The National  July 01, 2009

German and Austrian investors are demanding their money back from funds set up for the construction of the Niki Lauda, Michael Schumacher and Boris Becker towers in Dubai.

The investors paid about €150 million (Dh779.7m) into funds to pay for the buildings. The investments would then be repaid from the capital gains.

But the investors said money due in March had not been repaid and they were consulting lawyers to withdraw their money from the funds.

Alternative Capital Invest (ACI), the investment company behind the project, insists it has “solid assets” and the towers will go ahead, according to its managing director, Robin Lohmann.

Mr Lohmann said the money to repay investors was not available because the projects could not be sold as planned due to the market slowdown.

He offered the investors the choice of waiting until ACI’s assets could be liquidated, or the chance to take property assets owned by another company, Falcon International Investment Group, based in Dubai.

But some investors fear that if they accept the Falcon option, they may end up with additional risk and costs.

“Since I do not know the value of Falcon’s properties nor what exactly the liabilities and commitments are according to Dubai law, I am extremely sceptical,” said Hartmut Goddecke, the lawyer for several German investors. “We don’t know what exactly we are buying here.”

According to Martin Kraeter, a German business facilitator based in Dubai, the ownership of Falcon’s assets is unclear, although it has links to ACI.

Falcon only speaks about reservation contracts of different properties but reservation contract is not a purchasing contract,” Mr Kraeter said. “We may end up with shifting Falcon’s risk into investors’ responsibility.”

But Mr Lohmann said: “With this package, we just wanted to show people that we have the ACI assets which are the Boris Becker Tower, the Schumacher Tower and all the rest, and th0at in addition to that we also offer a security package through Falcon of fully paid assets worth about €100m, which is almost the double of what was due in March.”

In Dubai, property buyers who have invested off-plan in apartments in ACI’s buildings are also upset at delays in construction. Mr Lohmann said there had been complaints from the buyers but also delays in their payments to the developer.

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