A New Year should be a new start for Nakheel


  • Share via facebook
  • Tweet this
  • Bookmark and Share

The chances are you have never heard of Sanjay Manchanda, though that’s not entirely surprising. After all, not many people would want to boast that they are CEO of Nakheel, a company that was forced to write down the value of its real estate assets by $21.4bn since 2008, and has been forced into a $16bn debt restructuring plan.

But the man at the top of Nakheel’s tree ended 2012 with a fair bit of rattle and hum, deciding it was time to offer his views on the company’s long-running dispute with its customers on the Palm Jumeirah over service charges.

“We were made the scapegoat. It was being said that we were not doing enough and we were increasing charges, but on the contrary people have found out that these were unfounded allegations against us,” Manchanda told Emirates 24/7.

Really? Scapegoat is a strong word. Last time I looked, the definition was “a person or group made to bear the blame for others or to suffer in their place.”

Master developer Nakheel’s long-running battle with its customers on the Palm Jumeirah started in December 2011, when it banned more than 1,300 residents from using the beaches and gyms at its Shoreline Apartments residences and claimed it was owed $20m in unpaid service charges. As has been well documented by this magazine, the vast majority of people “banned” are tenants who have paid a full year’s rent in good faith, on the understanding this would include beach access. When they tried to enter the beach, they were booted out – on some occasions, Nakheel even called the cops to enforce this.

But presumably none of these people are “scapegoats”? After all, the people on opposite sides of a dispute can’t both be scapegoats, so I guess in Nakheel’s book, these people were just in the wrong place at the wrong time. Tough luck.

What about the trade creditors roped into the $16bn debt restructuring plan because Nakheel couldn’t pay its bills? Well they can’t be scapegoats as well.  I guess these people were just, you know, a bit unlucky, such is life. Tough luck.

Likewise anyone who invested in the Palm Jebel Ali, or the Waterfront. Business is business – tough luck. And looking at Nakheel’s website this morning, it is still proclaiming that The Palm Jumeirah will be “anchored by the Trump International Tower and Hotel.” You invested in that? Your fault. Tough luck.

I’ve never met Manchanda, though from what I hear, he has one of the finest financial brains on the planet. Originally seconded from PriceWaterhouseCoopers in October 2010 to help with the debt restructuring, the graduate of New Delhi’s Shri Ram College of Commerce took less than a year to thrash out a deal with banks and creditors.

He deserves huge credit for this, and I genuinely hope he succeeds in his new and very challenging role. His work ethic and dedication to the job, I am told, is second to none. His focus on the more lucrative retailing sector, including developing a shopping mall on the Palm, are right on the mark, and the company is on track to deliver close to 5,000 new units this year. Doubling profits to $299.5m in the first nine months of 2012 takes skill, leadership and vision – three qualities Manchanda clearly possesses in abundance.

But when it comes to the row over service fees, he may want to read what UAE business legend Khalaf Al Habtoor told this magazine recently:  “It was 100 percent [damaging] and unacceptable. If I am buying a house and using the beach and later told I have to pay for the beach, this is abnormal. This is damaging the reputation of my country.”

The New Year would be a good time for a new start on this issue.

Anil Bhoyrul is the Editorial Director of Arabian Business. You can follow him on Twitter at @AnilBhoyrul

Related:
Companies
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Peter Hudson

Sanjay Manchanda is a refreshing change from those who were previously running Nakheel and brought it to ruin.

Real Estate is a simple business but it's an unforgiving business.

2+2 is always 4 and never 22. Never has been and never will be! Sanjay Manchanda knows that. He also knows Nakheel has a very long way to go before it's able to get over its customer relations and financial management fiascos and salvage even a small measure of credibility.

Posted by: Ronald

The first order of business for Sanjay Manchanda this year should be to fire his spin advisors, who have led him down a woeful path of confrontation and hectoring. He presides over a company that single-handedly destroyed Dubai's reputation yet he continues to tell investors it is their indaba that he can't pay bills of finish projects. By being aggressive and insensitive he has drawn the battle lines, and the media will be unforgiving, even when he turns a profit.

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Time to invest?

Time to invest?

Foreign investors are seeing Qatar as an ideal place to purchase...

1
Heading for a correction?

Heading for a correction?

Property prices may have held relatively steady in Lebanon during...

1
Emaar's 'city of the future' explained

Emaar's 'city of the future' explained

The Iraqi city of Erbil is aiming to build on Dubai’s rapid march...

1
Most Discussed
  • 54
    Three UAE women attacked with hammer at London hotel

    I really feel that Arabian Business.Com should now close this comments page. This should be all about sympathy for the families not what it is/has turned... more

    Wednesday, 16 April 2014 1:06 PM - Adrienne
  • 51
    Why Dubai isn't a plastic city

    What is definitely not a plastic city. The Arabs have a culture dating back to several centuries. 50 years back Dubai was just a fishing village. Today... more

    Tuesday, 8 April 2014 3:49 PM - P. MADHUSUDAN
  • 48
    DMCC boss Ahmed Bin Sulayem entertains Robert Mugabe in Dubai

    @fga ''However today, simply because he decided to dispossess a few white farmers of their land and redistribute to the poorer indigenous blacks'' more

    Sunday, 13 April 2014 3:02 PM - Matt Williams