UAE investigates real estate chairman over fraud allegations
The company is under investigation after complaints were filed by the Securities and Commodities Authority, and the Federal Public Funds Prosecution requested Khalifa al-Hammadi chairman of Dubai-based Union Properties PJSC, be detained, Bloomberg reported.
The investigation began due to allegations that the firm sold property at less than its real value and hid the name of the beneficiary of the sale, as well as forgery of documents and other violations, a statement from the UAE's attorney general carried by the state-run WAM news agency read.
“The investigation involves complaints lodged by the Securities and Commodities Authority on allegations of financial violations committed by Khalifa Hassan al-Hammadi, chairman of the board of directors of Union Properties, along with some of its officials,” the statement read.
The announcement by prosecutors renewed questions about the wider stability of Dubai’s boom-and-bust real estate market, which saw Union Properties pile on some $2 billion of debt during the city-state’s financial crisis over a decade ago.
The company had nearly $500 million in debt at the end of last year, according to their financial filings.
A stock market filing by Union Properties identified a March 2020 transaction in which Amna al-Hammadi purchased a property for 30 million dirhams ($8.1 million) that had been earlier valued at 49.5 million dirhams ($13.4 million). Previous filings on the London Stock Exchange identified Amna as Khalifa al-Hammadi’s sister.
Union Properties, like other firms, has struggled to come out of the shadow of Dubai’s 2009 financial crisis, when its property market collapsed. The city ultimately received $20 billion in bailouts from Abu Dhabi, the Emirates’ oil-rich capital.
Union Properties abandoned the construction of a $460 million Formula One theme park in Motor City during the crisis, with its CEO at the time saying banks were no longer willing to lend money. Creditors, including the state-linked bank Emirates NBD, pursued the firm over loans of $2 billion.
Emirati prosecutors said they would probe the allegations of fraud, even as the firm is struggling with debt.