The man at the top of indebted Nakheel’s tree ended 2012 with a fair bit of rattle and hum
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