DUBAI, UAE –
Emirati prosecutors stated Sunday they launched a serious investigation into Dubai-based actual property developer Union Properties, saying they’d probe allegations the long-troubled agency dedicated fraud and different offenses whereas attempting to claw its manner out of debt.
Union Properties, recognized for constructing Dubai Motor Metropolis, didn’t reply to repeated requests for remark.
The announcement by prosecutors renewed questions in regards to the wider stability of Dubai’s boom-and-bust actual property market, which noticed Union Properties pile on some US$2 billion of debt throughout the city-state’s monetary disaster over a decade in the past.
The corporate had almost US$500 million in debt on the finish of final yr, based on their monetary filings.
A press release carried by the state-run WAM information company stated the investigation concerned allegations of the agency promoting property at lower than its actual worth and hiding the title of the beneficiary of the sale, in addition to forging paperwork and different violations.
“The investigation entails complaints lodged by the Securities and Commodities Authority on allegations of monetary violations dedicated by Khalifa Hassan al-Hammadi, chairman of the board of administrators of Union Properties, together with a few of its officers,” the WAM assertion stated.
A inventory market submitting by Union Properties recognized a March 2020 transaction wherein Amna al-Hammadi bought a property for 30 million dirhams (US$8.1 million) that had been earlier valued at 49.5 million dirhams (US$13.4 million).
Earlier filings on the London Inventory Trade recognized Amna as Khalifa al-Hammadi’s sister.
Neither Amna nor Khalifa al-Hammadi could possibly be attain for remark. Union Properties’ submitting sought to elucidate the sale by noting it got here amid “the unfold of the COVID-19 pandemic and its accompanying destructive results — and in gentle of the corporate’s dedication to settle its debt in the direction of its lenders.”
Different filings on Sunday to the Dubai Monetary Market confirmed shareholders wished a vote later this week to presumably take away its board of administrators. Individually, the corporate stated certainly one of its subsidiaries was concerned in a lawsuit in search of almost $1 billion, with out elaborating.
Shares in Union Properties fell as a lot as over 9% in buying and selling Sunday on the Dubai Monetary Market earlier than closing down 4.83 per cent to 26 fils a share, or 7 cents.
The agency’s present shareholder construction wasn’t instantly clear, although a profile from the information agency Refinitiv confirmed its main investor because the Bluestone Fund.
Union Properties, like different companies, has struggled to come back out of the shadow of Dubai’s 2009 monetary disaster, when its property market collapsed. The town in the end receiveUS $20 billion in bailouts from Abu Dhabi, the Emirates’ oil-rich capital.
Union Properties deserted the development of a US$460 million Formulation One theme park in Motor Metropolis throughout the disaster, with its CEO on the time saying banks have been now not prepared to lend cash. Collectors, together with the state-linked financial institution Emirates NBD, pursued the agency over loans of US$2 billion.
Even as we speak, Emirates NBD advertises dusty buildings in Motor Metropolis as being out there on the market or hire.
“At this time’s information was surprising, however we have to be clear that it is a good factor that there’s a system, a system that adheres to punishing people who find themselves accountable,” stated Waleed al-Khatib, a managing accomplice on the Abu Dhabi-based buying and selling agency International For Shares and Bonds.
Nevertheless, Dubai nonetheless faces looming debt funds that stem from its 2009 monetary disaster.
Dubai and its government-linked companies face an enormous US$30.6 billion invoice coming by 2023, based on London-based Capital Economics.
Dubai itself insists it is ready to cowl its money owed and that state-linked companies must be thought of separate from the sheikhdom’s affairs.