Dubai: Police have reportedly arrested the managing director (MD) of a boutique investment firm in Al Ithraa Tower in Al Garhoud which peddled a Dh7 billion real estate project in the city, mirroring the architecture and design of old Islamic eras.
A comment from police was not readily available, but lawyers handling the case confirmed to Gulf News that the 47-year-old Indian has been taken into custody following complaints of fraud.
In January 2018, the accused had boasted about how residents would move around in carts pulled by donkeys and horses in the walled city.
His investment firm was behind the ambitious development announced in Dubai with great fanfare earlier this year.
Supposed to sprawl over 20 million square feet, the compounded city promised to reflect the traditional lifestyles of three Islamic eras - Ottoman, Mamluk and Ummayad dynasty which ruled the Muslim world for hundreds of years.
At a press conference held at Burj Al Arab Hotel in January 2018, the firm’s managing director had boasted how residents of the development could relive the great Islamic civilisations of yesteryears as they moved around the community in carts pulled by donkeys and horses in the walled city.
“They took money from our client but failed to deliver. We had no option but to involve authorities,” said Abdullah Nasr, legal representative of Louloulat Al Sharq company, which had tied up with the investment firm for the realty project that was estimated to cost between Dh5-7 billion.
Another complainant, N.S., who runs a construction firm, said they have lost Dh2 million.
“We gave the investment firm an advance of two million dirhams on the back of tall promises. When we asked them to return our money, they gave us cheques all of which bounced,” N.S. told Gulf News.
Similarly, Gangadharan, chairman of Sree Dhanya Construction in Al Qusais, also claimed to have been duped out of Dh2 million.
“We gave the investment firm Dh2 million upfront. We were told that the money will be used to raise a $200 million loan from a bank in China.
"Out of this, we were supposed to get Dh50 million which we had to repay the investment firm over five years at an interest of 7 per cent as per our agreement. It sounded a good deal and we fell for it,” Gangadharan, who is currently in India, said in a telephonic interview.
The chairman of the investment firm is also facing investigations in India where he claimed to have injected $100 million in Just Buy Live, an online distribution platform connecting brands with retailers and small and medium enterprises.
“We never got any money. In fact, they have left our company in despair,” said a representative of Just Buy Live.
How to avoid falling for a real estate fraud
Of late, there have been numerous instances of people falling for real estate scams. Here’s how to avoid them:
1. Check the trade licence of company and see if its activities are mentioned in its DED licence.
2. See if the project is registered with Real Estate Regulatory Agency (Rera) the legal arm of Dubai Land Department. Its website www.dubailand.gov.ae also allows you to look up the status of each project.
3. Use Escrow account while making payments.
4. Verify the antecedents of the person you are dealing with.
5. Don’t rush into signing a deal. Ask questions.