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The hearing begins and a few words and papers are exchanged between the judge and the lawyers representing each side.

Within minutes, it is all over. Claimants and defendants are quickly ushered out of the courtroom as their respective lawyers whisper a roughly translated version of the judge’s ruling. Moments later, the next case begins.

Welcome to Dubai’s Property Court, a division of the emirate’s legal system that has been dealing with the fallout of its property crisis since September 2008.

As case files spill out of a room one floor down from the court, officials decline to reveal how many property disputes are under way or pending. A clerk in charge of registering cases hints that the figure may be in the “thousands”.

“We are overwhelmed … it is too much work,” says the clerk, who does not want to be named. “Some cases are small, some are big. People should try and settle with the developer as they will spend more bringing the problem here.”

Just a few months after it opened in 2008, the Property Court had a mammoth challenge on its hands after the property downturn.

The court is a “work in progress”, says Dr Jamal Alsumaiti, the director general of the Dubai Judicial Institute. “You can see there’s movement from the government for regulation and for developing the judicial system as well … it’s a very critical period.”

Ron Oakeley is more than familiar with the Property Court, and the huge investment of money and time that come with a lawsuit.

The British businessman, who has been in Dubai since 1985, is about to attend his 15th hearing in a case filed more than a year ago against Alternative Capital Investment (ACI), a German developer.

Mr Oakeley is trying to recover more than Dh1.2 million (US$327,000) he spent on two offices at ACI’s long-delayed Niki Lauda Twin Towers, one of a trio of projects launched in late 2007.

His efforts, in part, paid off in February when the court rendered his agreement with ACI for one of the units “void” and ordered the company to repay him Dh569,585, plus 5 per cent interest from the date he started proceedings.

The court ruled for Mr Oakeley because ACI had failed to register the property with Dubai’s Land Department, according to court documents. A property contract is valid only when it is registered with the department.

But Mr Oakeley lost the case for the second unit, which cost Dh695,000, because the court found that the property had been registered, although it has since emerged it was under somebody else’s name.

ACI was quick to appeal the decision on the first unit. At yesterday’s hearing, the court decided to appoint an official to check on construction progress at the site, which appears to be at a standstill.

If there is still no conclusion at the next hearing, scheduled for June 23, then the case could go to the Court of Cassation, the final stage in the judicial process.

Mr Oakeley is one of dozens of investors with suits against ACI. He says it has so far cost Dh400,000, including fees and the cost of lawyers. But with the project showing little sign of progressing, he says he has no choice but to fight on.

“It’s the principle … most people can’t afford to keep fighting,” he says. “Unlike elsewhere in the world, you’ve got to spend so much more money to get your rights. There are hundreds of other projects in the same boat but nobody seems to be helping the people.”

Robin Lohmann, the chief executive of ACI, was unavailable for comment in the past two days.

Property disputes are generally filtered through the Dubai Land Department, where the department’s legal team tried to resolve them before they reach a courtroom.

While there is a surge in the number of investors turning to the department after the financial crisis, fewer people are approaching it today, says Mohammed Sultan Thani, the assistant director general of the Land Department.

“We are now seeing a lot of agreements between the buyer and seller,” Mr Thani adds. “There’s been a lot of movement of buyers between a project that hasn’t started to one that has.”

Since the Property Court is costly, it has mainly been used by major investors such as Mr Oakeley, who have the funds to pursue a case.

It costs Dh30,000 to register each case with the court, so if an investor has bought 10 apartments from one developer, simply lodging the dispute will cost Dh300,000.

As well, all cases require a local lawyer, who will charge a commission of up to 5 per cent of what the client is claiming. The proceedings are in Arabic so a claimant would have to pay for the translation of court documents as required.

“For an investor contemplating filing a legal case against a developer, it is advisable to first seek consultation with a lawyer who can advise whether filing a case makes sense based on the circumstances,” says Ludmila Yamalova, a partner at Al Sayyah Advocates and Legal Consultants.

Some cases have been settled out of court, Ms Yamalova adds, with developers agreeing to reimburse claimants in instalments.

With just four judges at the Property Court, cases can be long. But more than 18 months after it was established, steps are being taken to refine the system, says Dr Alsumaiti – a move that will likely boost confidence among investors.

“Four judges are not enough,” he says. “The concept of having a specialised property court isn’t new but the implementation is. The judges need to have the skills and knowledge to understand every single detail of a case. As long has you have provisions to speed up your procedures, you have a very strong legal system.”

agiuffrida@thenational.ae

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Die Alternative Capital Invest GmbH aus Gütersloh (NRW) hat gar keine Beteiligungs-Fonds mehr, und auch die 300 Millionen Euro Anlegergelder sind komplett in emiratischen Firmen versenkt, dennoch fordern die nun eigentlich arbeitslosen ACI-Chefs Robin Lohmann (34) und Vater Uwe Lohmann (64) in einem Bettelbrief für 2010 und die nächsten Jahre für eine so genannte Liquidationsphase von den Anlegern ein Gehalt von jährlich 1,1 Millionen Euro. Für jeden der vier Ex-Fonds (Kommanditgesellschaften II bis V) genau 266.560 Euro.

Die Anleger würden diese “freiwillige Umlage” kaum spüren, heißt es in dem von Geschäftsführer Uwe Lohmann unterschriebenen Brief vom 17. Dezember 2009. Lediglich 150 Euro seien pro 10.000 Euro Einlage nötig. Die Anleger bräuchten auch nichts zu tun. Das Geld werde automatisch von der ACI immer am 15. Januar eines jeden Jahres gleich für das ganze Jahr im Voraus abgebucht.

Betroffen sind 5.000 Anleger aus Deutschland, Österreich und der Schweiz. Offiziell ist es eine Gesellschafterbeschlussvorlage, über die die Anleger bis zum 17. Januar 2010 per Fax an das Gütersloher Büro der ACI abstimmen sollten. Wie die Abstimmung ausgegangen ist, darüber hüllt sich die ACI-Leitung bis heute in Schweigen.

Wörtlich heißt es im Schreiben von Geschäftsführer Uwe Lohmann vom 17. Dezember 2009 zu Fonds Nummer II (die Schreiben zu den anderen drei Fonds III, IV und V sind gleichlautend):

Robin Lohmanns Zwillingsschwester
Nadine (34) und Vater Uwe Lohmann (64)
Robin Lohmanns Zwillingsschwester
Nadine (34) und Vater Uwe Lohmann (64)

Zitat:

Honorar der Komplementärin / Kostenerstattung zur Abwicklung während der Liquidationsphase

Da die Geschäftsführung – wie Sie auch – davon ausgegangen war, dass die Liquidationsphase der Gesellschaft angesichts des bereits abgeschlossenen Kaufvertrages mit der Firma YAMA allenfalls bis März/April 2009 anhält, hatte sich die Komplementärin mit einer Pauschalvergütung für die bevorstehende Abwicklung in 2009 in Höhe von 60.000 Euro (zuzüglich Mehrwertsteuer) unter Freistellung der Fondsgesellschaft von weiteren Kosten bereit erklärt.

Da der Kaufvertrag nicht durchgeführt werden kann und nicht abzusehen ist, wie lange die Liquidationsphase noch anhält, ist die Geschäftsgrundlage für diese Vereinbarung entfallen. Die Komplementärin ist nicht in der Lage, ohne entsprechende Honorierung die Geschäftsführung nebst Übernahme der persönlichen Haftung weiterzuführen.

a) Honorar für Geschäftsführung und Haftungsübernahme

Die Geschäftsführung schlägt vor, der Komplementärin für die Zeit ab 1.1.2010 und für die Dauer des weiteren Liquidationsverfahrens ein Honorar von jährlich 120.000 Euro (zuzüglich Mehrwertsteuer), zurzeit also brutto = 142.800,00 Euro pro Jahr zu gewähren, und zwar für die Geschäftsführung und Übernahme der Haftung.

Die Vergütung ist fällig jeweils jährlich im Voraus per 15.01. eines jeden Jahres, erstmals per 15.01.2010. Die vorgeschlagene Gesamtvergütung liegt weit unterhalb des prospektierten Honorars für die Geschäftsführung, obwohl der Arbeitsumfang und das Risiko während der Liquidationsphase erheblich gewachsen sind.

Danach fallen jährlich folgende Kosten für die Komplementärgesellschaft ab 01.01.2010 an:

Honorar für Geschäftsführung und Haftungsübernahme: 120.000 Euro zuzüglich Mehrwertsteuer, zur Zeit somit 142.800 Euro.

b) Der sonstige Aufwand / Auslagen, die von der Gesellschaft an die Geschäftsführung zu erstatten sind,

werden auf mindestens 100.000 Euro pro Jahr kalkuliert. Dazu gehören unter anderem:
Treuhandkosten pro Jahr: 15.000 Euro
Rechtsberatungskosten und Prozesskosten Deutschland: 12.000 Euro
Steuerberatungskosten /Jahresabschlüsse: 40.000 Euro
Rechtsberatungskosten Dubai 10.000 Euro
Rundschreiben / Abstimmungsunterlagen / Protokolle: 10.000 Euro
Kosten von Veranstaltungen / Raumkosten / Gastronom: 3.000 Euro
Anteilige Kosten Gesamtbeirat (inklusive eventuelle Spesen): 1.000 Euro
Notarkosten / Apostillen usw.: 1.000 Euro
Sonstiges: 12.000 Euro
Summe geschätzter sonstiger Aufwand / Auslagen pro Jahr: 104.000 Euro zuzüglich 19 Prozent Mehrwertsteuer 19.760 Euro
Gesamt brutto Aufwand / Auslagen: 123.760 Euro

c) Insgesamt fallen somit jährlich folgende Kosten bei Ihrer Beteiligungsgesellschaft an:

Geschäftsführungshonorar, siehe oben a) ergibt 142.800 Euro
Sonstiger Aufwand / Auslagen, siehe vorstehend b) 123.760 Euro

Insgesamter Kostenaufwand für die Gesellschaft: 266.560 Euro

Insoweit wird vorgeschlagen, zu beschließen, dass die Beteiligungsgesellschaft für die Dauer des Liquidationsverfahrens ab dem 01.01.2010 an die Komplementärin 120.000 Euro und weitere 104.000 Euro an sonstigem Aufwand, jeweils zuzüglich MWST, zahlt, fällig jeweils zum 15.01. des Jahres.

d) Die Geschäftsführung wird versuchen, die vorstehenden Kosten durch eine freiwillige Umlage zu erheben, um die Ausschüttungen nicht zurück fordern zu müssen. Die Umlagebträge belasten den einzelnen Gesellschafter relativ gering (im Verhältnis zur gezeichneten Kommanditeinlage).

Beispiel: Bei einem gezeichneten Netto-Kapitalbetrag von 10.000 Euro und einer jährlichen Umlage von 266.560 Euro macht dies bei der II. Dubai Tower Fonds KG folgende Belastung pro Jahr aus:

(Gesamtkosten) 266.560 Euro: (Fondsvolumen) 17.144.500 Euro = 0,015 Euro x 10.000 Euro = 150 Euro.

Auf je 10.000 Euro Kommanditbeteiligung fallen somit pro Jahr 150 Euro an Vergütung für die gesamte Geschäftsführung (inklusive Drittleistungen und sonstiger Aufwand) an. Den auf Ihre Beteiligung anfallenden Betragsanteil werden wir, damit für Sie kein zusätzlicher Arbeitsaufwand entsteht, je nach Beschlussfassung von Ihrem Konto einziehen.

Es wird vorgeschlagen, entsprechende Beschlüsse zu fassen.

Möglicherweise endete die Abstimmung wieder einmal mit einer Watschen. Denn der Gehaltsbettel-Brief vom 17. Dezember 2009 ist schon der zweite. Der erste Bettelbrief vom September 2009 war am Wiederstand der Vertriebler gescheitert und fiel bei den Anlegern durch. Damals forderte die ACI-Führung einfach die Fortsetzung ihrer Bezahlung in Höhe von rund einer Million Euro pro Fonds, also insgesamt vier Millionen Euro pro Jahr.

Aber damit sich das nicht wiederholt, haben die ACI-Chefs Druck aufgebaut. Sie drohen den Anlegern im neuen Schreiben unverhohlen mit Insolvenz und mit horrenden Zahlungen, die die Anleger als Gesellschafter der Fonds-Kommanditgesellschaften dann zu leisten hätten.

Und die 300 Millionen Euro, die die Anleger insgesamt eingezahlt hätten, seien im Insolvenzfall für immer verloren. Zur Bekräftigung veröffentlichten die Lohmanns auf der ACI-Webseite einen Brief eines Wirtschaftsanalysten, der mal eben klar stellte, dass es zwecklos sei, in Dubai versickertes Geld zurückholen zu wollen.

» ACI-Bettelbrief für Ex-Fonds II
» ACI-Bettelbrief für Ex-Fonds III
» ACI-Bettelbrief für Ex-Fonds IV
» ACI-Bettelbrief für Ex-Fonds V
» ACI-Bericht an die Anleger vom 17.12.2009

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

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

Kroll, an international risk consultancy, said last week the Middle East was the world’s only region to see a rise in fraud in the past year. It singled out corruption and bribery as the single largest threats.

“For seven out of 10 cases of fraud, it had the highest incidence of any region, including bribery and corruption,” Kroll said. Average financial losses from corruption doubled to US$11.5 million (Dh42.2m) this year from $5.6m last year, it said.

Other analysts point to what could be much larger losses. KPMG said last year fraud had risen to “alarming” levels within the six-nation GCC and estimated that losses from financial crime are likely to exceed several billion dollars a year.

Bribery and corruption may no longer be receiving the same attention since the arrival of the global financial crisis in the Gulf, but momentum is now building across the region to improve corporate governance, disclosure and auditing practices.

“In a crisis you look to stabilise things,” says Simon Charlton, the managing director of forensic and dispute services at the auditing and consulting firm Deloitte. “Everybody’s energy is focused just on that.”

Now the drive for more accountability is returning with a vengeance, helped by the recent debt defaults at the Saad Group and Ahmad Hamad Al Gosaibi and Brothers, two Saudi family-run conglomerates.

While financial institutions around the world are still counting the cost of their exposure to the two groups, regional lenders have already radically changed their approach to “name-lending”, applying far greater scrutiny to loans involving families that previously traded on their reputation.

“Lenders also appear to be doing much more due diligence now but it does not finish there,” says Mr Charlton. “Investors are asking far more about companies’ anti-fraud policy, their governance structures, the way they manage their risk, and seeking more transparency and accountability.

“Previously there was this perception that if you have a problem, it is best swept under the carpet. But now people are prepared to talk about bribery, fraud, mismanagement and government failure.”

According to information collected by The National, there are at least 11 court cases under way involving allegations of fraud in Dubai, while 34 company executives have either appeared in court to answer charges or are due to do so.

About $950m is alleged to have been stolen or used as bribe money, according to files from public prosecutors that give the first overview of the anti-corruption campaign.

Since March last year, lawyers appointed by the Dubai Government have been investigating executives from some of the emirate’s leading property and financial firms.

The first round of last year’s high-profile arrests and charges included top executives of three listed firms: Deyaar, Dubai Islamic Bank and Tamweel, the Islamic home lender. A second round concentrated on property developers.

Sama Dubai, a part of the government-owned Dubai Holding, was the focus of an investigation last August, when four of its executives were detained.

In a separate case, a top executive of a developer was charged with allegedly defrauding 3,700 investors of more than Dh900m.

And two Australian executives of the Dubai Waterfront project are accused of defrauding the Sunland Group, obtaining Dh44m in illegal profits and giving false information about the ownership and value of a plot of land. The two were granted bail in Dubai last week.

But for many analysts the problem of fraud within the Gulf is broader than the various corruption investigations before the courts.

“They are a test for the whole corporate governance and legal system,” says Wadah al Taha, an independent analyst and certified fraud examiner who was involved in the investigation into one of Dubai’s listed companies.

Mr al Taha says corporate governance is yet to be developed as the first line of defence for government or the private sector within the region, but it would help prevent fraudulent activity.

“Companies think compliance and corporate governance ends with audit,” Mr al Taha says. “In fact, it goes way beyond people’s perceptions and what corporations have been practising in this part of the world.”

Dubai’s highly publicised attempts to hunt down corruption within the ranks of some of its largest companies has raised local awareness of the issue, but do high-profile arrests help to deter others?

“Putting one guy in jail hopefully acts as a deterrent, but history has shown that there will always be greed and fraud,” says Mr Charlton.

“You cannot eradicate it. You can only build a structure and educate all stakeholders to make it less likely, and introduce early warning systems.”

That should also address existing ways of doing business such as the historical reliance on post-dated cheques.

Under UAE law, bouncing a cheque can lead to a jail sentence. This has been identified as one of the factors behind the exodus of indebted expatriates, known to bankers as “skips”, over the past year.

Several property developers and brokers have been jailed on cheque fraud charges.

Abid Ali, the owner of an outdoor exhibition company, lost more than Dh500,000 in a deal involving post-dated cheques when his client fled the country leaving a Dh4m trail of debts.

“Once a working relation is established and a credit cycle is in place, people can easily defraud firms of their payments which is evident in our case,” Mr Ali says, adding that a financial shock such as this makes it hard for a small business to survive.

Ultimately, the need to attract and retain foreign investment may become the biggest incentive for regional governments to ensure that anti-fraud measures remain a top policy priority.

“Abu Dhabi and Dubai see themselves as part of the global fabric,” says Mr Charlton. “They want to attract foreign investment and have top rankings in terms of places to do business. They want to be known as a clean place to do business and to get there things like enhanced corporate governance, transparency and accountability are important.”

uharnischfeger@thenational.ae

At the end of this month the book about the ‘Queen of Fraud’ Malika Karoum will be released in Amsterdam.

Click on the book for a preview:

image3821

This book will show the truth, the whole truth and nothing else but the truth about Malika Karoum and all the crimes she committed.

Don’t hesitate to buy this book, it will be a real ‘eye opener’.

Source: The Sydney Morning Herald

While Australians languished in Dubai jails, a much bigger fish made fraudulent millions with impunity. This glamorous but treacherous spy is finally behind bars, writes Rick Feneley.

Drieluik MalikaThey call her the modern-day Mata Hari, a spy-turned-criminal who laundered fortunes from drug runners and arms dealers through Dubai’s high-rise wonderland.

Alternatively, they have cast Malika Karoum as an innocent woman, a fugitive not from the law but from an abusive husband who maliciously defamed her – and concocted the whole spy-crime thriller – as part of a bitter custody battle for their young son.

The Netherlands media have been wrestling over the two Karoums for a year. The 33-year-old Dutch-Moroccan’s exotic good looks made great fodder for magazines, newspapers and tabloid television. But on Wednesday this week came the bombshell. The cover story of Revu, a quality weekly magazine, announced: ”Spy Malika in the cell.”

Only now could it reveal that Karoum had been in jail for the past six months in Egypt, where the Ismailiya State Security Court convicted her in April of money laundering and involvement in weapons trading, but acquitted her of espionage.

Karoum, who had also performed intelligence work for Egypt, had been sentenced to 28 months in prison, and the Court of Appeal had upheld the decision last month.

More sensational, though, is the news of how Karoum was caught. In a top-secret operation, her former colleagues from the Dutch secret service arrived at her Dubai apartment at 2am on January 21. They held her there for several weeks under house arrest before taking her to Egypt, an intelligence source has told Revu’s reporter Jan Libbenga. Dubai has no extradition treaty with the Netherlands. The Dutch, in effect, abducted Karoum only after negotiations with her lawyers, to bring her back to Amsterdam, broke down.

Four days after the swoop on Karoum’s home, Dubai police arrested two Australians, Matt Joyce and Marcus Lee, on suspicion of fraud. The pair are former executives of Dubai Waterfront, the world’s grandest waterfront project, a subsidiary of the Emirate’s biggest property developer, the government-owned Nakheel.

The jailed Australians, who are fighting to prove their innocence, are in no way linked to Karoum.

Karoum – using her apparent cover as a real estate executive – did do some work on property developments within Dubai Waterfront, among other sites. She was accused of funnelling drug and arms money – including that of an Egyptian weapons dealer – into Dubai’s property bubble, which burst spectacularly last year. Millions invested through her by criminal networks are said to have vanished.

While Joyce and Lee and other Australians languish in Dubai’s jails, the Karoum story throws light on the way business is done in the Emirate. The sheikhdom is making a big show of cleaning up corruption in its property industry, but it showed no apparent interest in stopping Karoum. Indeed, Libbenga says, she ended up spying for the United Arab Emirates, too, and it offered her protection. She had also spied for Egypt.

Her old Dutch colleagues could well understand the analogy with the original Mata Hari, the Dutch exotic dancer Margaretha Geertruida Zelle, a seductress who became a double agent during World War I, working for both French and German spymasters.

Karoum joined the Dutch secret service in 2004, Revu says. Most of her work had concerned secret investigations of Islamic organisations in the Netherlands suspected of terrorist aid. She was sent to Dubai late in 2006 to investigate terrorist financing and money laundering to and from Dubai. Once there, she soon defected to her own cause: making money.

For her Dutch spymasters, the alarm rang in October 2007, when a Dutch-Turkish money courier was arrested at Schiphol Airport, Amsterdam, with more than €100,000. He said it was to be collected by Karoum. This man was not known to her spy colleagues.

The secret service contacted police. It transpired that observation teams from the Bureau of National Research had photographs of a woman in the company of Dutch drug dealers. Only then did they realise it was Karoum.

Now authorities suspect Karoum played an important role in drug trafficking, Revu reported.

Karoum had managed to slip back into the Netherlands at the time of the man’s arrest, but she escaped via Madrid and Casablanca to Dubai. She left her hire car behind, with a note to the hire company, in a garage in the town of Breukelen. Diplomatic pressure on Dubai failed to have her returned to the Netherlands.

The Herald began trying to find Karoum in early February this year. As late as April our calls were being transferred to her extension at ACI Real Estate in Dubai, the subsidiary of a German-based company. Like many caught in the Arab Emirate’s collapsing real estate market, ACI is struggling to complete grand visions such as its Sports Trilogy: the Niki Lauda Twin Towers, the Boris Becker Business Tower and Michael Schumacher Business Avenue. ACI’s switch repeatedly told the Herald that Karoum was, indeed, still working there. But messages went unanswered, as did emails to Karoum’s address with the firm, requesting a detailed response to the many allegations against her. Now we know why.

Also in February, Political News of Morocco editorialised that Karoum was giving its emigrants a bad name and asked why Dubai was doing nothing about her. Now we know that the Dutch secret service already had.

In a webcast by Panorama Magazine late last year, Karoum said the whole story against her was a lie, created by her former husband Mohammed Boulnouar. She said she had fled the Netherlands because he had mentally and physically abused her.

Jacques Smits, an Amsterdam private investigator (www.interrescue.nl) and former policeman , has been on Karoum’s trail since January last year. He was originally employed by Boulnouar to hunt her down in Dubai and retrieve their son, Mohammed jnr, now aged about eight.

In February last year Smits flew to Dubai, hoping to confront Karoum. He had already intervened and warned her then employer, the Dubai property firm Omniyat, about Karoum. The company went on to sack Karoum and her boss for alleged fraud.

Smits only managed to get Karoum by phone. He told the Herald: ”She said, ‘I am going to kill you.’ I had ruined her life in Dubai.”

He believes she is capable of it, and this motivated his campaign to bring her to justice, long after he stopped working for her husband. A Dutch court later ordered Karoum to return her son to the Netherlands, then overturned that ruling last December.

Either way, Smits is no friend of Boulnouar, who had been a travel agent in West Amsterdam. He says Boulnouar paid him only €7000 ($12,000) and still owes him €10,000. Smits says he helped Dutch intelligence to keep pursuing Karoum.

Last November customers accused Boulnouar of stealing the money they had paid him for the haj to Mecca. He had claimed he was the victim of a robbery on October 31 when he tried to deliver about €300,000 in cash and several hundred passports to Royal Jordanian Airways. He claimed the robbers told him they were sent by ”Malika”.

Smits does not buy his story. Nor does he buy Karoum’s. In January last year Smits received a tip that she was returning to the Netherlands for a wedding. He says he went to Schiphol Airport and, armed with photographs, alerted a Dutch military police officer. The officer had called up Karoum’s Interpol file, then left the room briefly to get the print-out of the document. Smits says he was able to read the warrant on the screen. ”There were six or seven felonies.” They included money laundering and drug offences.

Dutch police observation teams had seen a woman in the company of a British man, Simon John ”Slapper” Cowmeadow. Only later did they realise she was Karoum. Cowmeadow was shot dead in an Amsterdam street on November 18, 2007.

Nadim Imac, a suspected heroin importer and the sponsor of a Dutch soccer team, Turkiyemspor, was thrown to his death from a moving bus on February 17 this year. Police found €223,000 in his home.

A player from his soccer team had acted as a money courier to Dubai, where money from a Turk associate of Imac’s was invested in Damac Properties. Karoum had handled that introduction.

Revu has reported on Karoum’s connections with the Dutch company Palm Invest, which has come under the spotlight for alleged fraud. Karoum’s old boss at Omniyat took her with him in June last year when he launched Define Properties in Dubai. Define had 12 lots on Nakheel’s Waterfront site, and relied heavily for funds on a key Karoum contact, an Egyptian arms dealer. But when stories began circulating about Karoum, the boss sacked her.

Later, Define could not raise enough capital and ACI Real Estate took over some of its properties. It first employed the Define boss, but dumped him after recruiting Karoum. ACI has not responded to the Herald’s questions.

From last December Karoum’s lawyers advised her to co-operate with Dutch authorities. Revu reported she was offered an ”ample golden handshake” from the secret service and an opportunity to start a new life in a third country. Los Angeles, Singapore, Luxembourg, Malta, Egypt and the Dutch Antilles were destinations recommended.

The Dutch, more than anything, wanted to stop her giving intelligence to other countries, and to stop her criminal pursuits.

Karoum had seemed agreeable but withdrew at the last moment. She reportedly believed she would be afforded the protection of sheikhs in Dubai. That came to nothing at 2am on January 21.

In most countries the snatching of Karoum – a breach of sovereignty – would have caused a diplomatic crisis. But there has not been a peep out of Dubai, which does not care about bad publicity.

The Dutch Ministry of Foreign Affairs said it could not answer any of the Herald’s questions, on privacy grounds. The names of even convicted criminals are protected in the Netherlands.

Jan Libbenga will publish a book, The Hunt for Malika, Modern Mata Hari, in October.

Jacques Smits says an estimated €90 million is still missing from Karoum’s crimes and the Dutch secret service may recruit him to help retrieve it.

”If the price is right, I’m your guy,” he told the Herald. Smits says he feels safe until Karoum’s release from jail – but only until then.

Malika smilegroot

A tale of scorpion and the turtle

We all know the famous story about a scorpion asking a turtle to carry him across a river. The turtle is afraid of being stung, but the scorpion reassures him that if it stung the turtle, the turtle would sink and the scorpion would drown as well. The turtle then agrees; nevertheless, in mid-river, the scorpion stings him, dooming the two of them. When asked why, the scorpion explains, “I’m a scorpion; it’s my nature.”

Before investing in Dubai property market I have been warned about the ways and means of merchants and rulers from the Gulf. At the time I choose to ignore them, now I am not so sure I have made the right decision.

Dubai market has exploded in the past few years and attracted many foreign investors to participate in a very lucrative business based on off plan project model and huge potential profit. Most of the buyers were speculators who only wanted to invest in part of property process and later sell it with huge profit expectations. Dubai has had very small number of end user investors.

This business model was perfect until market price was rising and there was still enough interest for speculation. Developers also added their pot into this game by speculating with period when to sell off plan units. So they didn’t want to sell all units at once but rather gradually selling units by progressing of time. They wanted to get piece of profit cake as well protect themselves in the case of increasing construction expenses based on USD oscillation (AED is pegged to USD).

After recession started this seemingly perfect “business” collapsed for both sides Developers as well as Investors (speculators). Speculators over invested themselves and was never able to sustain whole investment in property. Their plan was to invest in short time as much as possible and sell it as soon as possible. But after market collapsed there was not any more buyers neither end users nor speculators. The whole construction progress gets stuck. Developers in the same time was circumvented Law commenced in the last few years. Mostly they have violated Law no 8 especially obligation to register every project with RERA and open separate account for each project solely. They did not open escrow accounts or they have open one and collect money on it and misconduct escrow agents, authority and at last investors that their money is save and exactly dedicated for the invested project. Many of accounts were depleted based on such mismatches and disability (intentional or unintentional) of authority to control developers. But frankly is there (in authority) anybody so bold to apply law to developers whose owners are close to top people in UAE?

Now there is question how to solve this situation? On one side there are Developers whose ownership is more or less in hands of top UAE people. And on the other side there are Investors and speculators who are mostly coming from outside. Who will be protected and who will be punished in this polarization is out of question. The question is just how to legally do it? After Developers spent most of investors money and they did not commence any construction they are in very delicate situation how to overcome this problem and not put on bankruptcy track. The authority came with solution how legally protect developers (read UAE people) and pull them out of trouble but at the same time show the world how they take care about investors and represent themselves as high standard rule of law country.

In summary most of I investors are going to lose money and almost all developers will have ability to legally cover illegally spent money.
The sliding scale and Law No 9 cannot be read in any other way than as in accordance with explanation above. Everybody who is reading Law No 9 in details will see that billions of money will be (now legally) stolen from investors. Can anybody imagine how to finance even 10-20% of purchased units without having help from any Bank today? So even if investors paid almost the whole amount they will lost all money. Speculators who never paid more than 30% will lose their entire investment.

So, dear fellows, find your position in this game and think about it! The only side who will benefit will be the domestic people who spent the money and still have at least plot in their hands as well as full basket of money on private accounts.

Matt Joyce had the world at his feet. Now he is staring at a Dubai cell wall
Rick Feneley (Morning Herald – Sydney)

UNTIL his arrest for suspected bribery last month, Matt Joyce was in command of the world’s biggest waterfront development, the most audacious project yet in Dubai Inc’s high-rise fantasia.

Joyce, the Australian managing director of the state-backed Dubai Waterfront, boasted of its vital statistics in a recent interview. Stretching 30 kilometres, it would cover 14,000 hectares, making it twice the size of Hong Kong Island.

dubai-waterfront

It would dwarf the emirates’s famous World and Palms developments. It would reclaim six islands and involve shifting enough sand to fill Wembley Stadium three times every month. And it would become home to 400,000 people within five years.

“We have the luxury of creating this city on a blank canvas,” said Joyce, who would oversee the construction of yet another space-age Atlantis rising from the Arabian Gulf. But Dubai’s blank canvas has become murky. Few of the world’s property bubbles became as inflated as Dubai’s, and few have burst so explosively in the global meltdown. Joyce, 43, the former Sydney-based chief of the respected property group St Hilliers, was among five senior executives made redundant from Dubai Waterfront last month.

Then, on January 25, he and two Australian colleagues were taken in for questioning as part of a year-long crackdown on fraud and corruption among state-backed property developers and banks. One of the Australians, a 55-year-old man from Brisbane, was released. But Joyce and another Melbourne man, 44, are still being held without charge. Both have families in Dubai.

Last night, Sydney time, the prosecution was in court applying to extend their custody for another 15 to 30 days. Their Australian lawyer, Martin Amad, was there and told the Herald: “No charges have been laid and both men strenuously deny the allegations.” He said they were confident that authorities would soon determine their innocence based on documentation they had supplied. He would not name Joyce’s colleague.

The men are among more than 20 executives in jail as part of Dubai’s fraud and corruption investigation. All are yet to be charged, but some have spent almost a year behind bars. Dubai police have given no details on who the Australians allegedly bribed.

Joyce’s lawyer in Dubai, Salem Al Sha’ali, had told the Gulf News:
“The suspected transaction cannot be considered a bribe. The figure isn’t exact and the amount was given back because the deal didn’t go through. It’s a big misunderstanding.”

Mr Amad said the quote, as reported, was inaccurate and he insisted there was no transaction and no deal. “No bribe was paid.

A former work colleague of Joyce’s, from Australand in Sydney, described him as “straight and decent”. “If there’s anything there, it would be totally out of character,” he said.

For the 16 months before his shift to Dubai, in April 2006, Joyce was chief executive at St Hilliers in Sydney. It is well known in the industry that he parted on unhappy terms, although his termination contract prevents St Hilliers from revealing the reasons. Joyce joined Dubai Waterfront, whose parent company is the government-owned Nakheel. Nakheel is the biggest developer in the United Arab Emirates and has projects worth about $US80 billion ($124
billion).

Asked how the Australians were being treated in jail, Mr Amad said they had no complaint. They were “anxious to be released” but there was slim chance overnight of bail. Joyce had been made redundant shortly before his arrest. Asked if there were fears that the men were being made scapegoats for the broader corruption inquiry, Mr Amad said he could not comment. “It is not an argument we are putting forward.”

Regardless of the case against the Australians, Dubai Inc is on trial in the eyes of the investment world, and the fraud crackdown has signalled the Emirate’s determination to send a clear message that it is a good place to do business.
Dubai property values are in free-fall. Some forecast they will drop by as much as 50 per cent this year.

Along with thousands of redundancies, local police reported at least 3000 cars abandoned outside Dubai international Airport in the four months to January. Many had keys in the ignition. It seems debt-ridden and jobless foreigners are fleeing Dubai. Nakheel insists Dubai Waterfront is forging ahead.

Unlike the other emirates, Dubai has little oil to speak of. It has only its real estate, built on the whims of its rich and its rulers. Only on this can it guarantee its future as a global financial hub.