Dubai: Union Properties, the Dubai developer, will initiate claims against former members of its Board of Directors. These members were “dismissed” at the general assembly called by the company on November 9.
‘Lawyers to proceed with lawsuit,” Union Properties said in a terse statement. On Tuesday (December 14), the developer elected four new members to replace the ousted ones.
The developer also named Mohamed Fardan Ali Al Fardan as Chairman while Abdul Wahab Al Halabi is the Vice-Chairman while also rejigging the Board of Directors.
Union Properties will be hoping that confirming a new head for the company and initiating “liability lawsuit” against former directors will draw a line in the sand between what has been a turbulent few months and a more hopeful future. The former chairman was placed under detention and other senior members came under the purview of investigations by federal entities. This relates to possible gains made on divestment of land assets last year.
Still heavy on debts
What will worry Union Properties’ shareholders is the amount of debt carried on the books. The only big gain from last year was the rescheduling of a near Dh1 billion exposure the company had with Emirates NBD.
“There needs to be a proactive handling of the debt – for that UP needs to speed ahead with more asset disposals,” said an analyst who has tracked the UP stock closely. “But with legal proceedings and investigations ongoing, can these be done?”
Union Properties’ nine-month results came as a rude jolt after successive quarters when it was felt that the company had a handle on its financials. New launches took place at Motor City and there was talk about a new three-year turnaround strategy.
Its results are in sharp contrast to the bullish numbers other mainline developers in Dubai had come out with for the year-to-end September period. Or in some cases drastically managed to bring down their losses.
Will the new regime at Union Properties bring about that sort of change?