Banned boss 'loaned himself $1.9mn'

EXCLUSIVE: Auditors' letters reveal 'unlawful' payments of disqualified CEO now working in Dubai.
By Andrew White
Tue 05 Aug 2008 06:15 PM

A disqualified UK real estate company director now running a Dubai-based company after his old firm collapsed, loaned himself almost $1.9 million from company funds before it went into administration, official documents show.

The revelation is contained in correspondence obtained by Arabian Business from the former auditors of London-based UK Land Investments Limited, now in administration

Balinder Chohan was founder and sole shareholder of UK Land Investments Limited (UKLI) until it went into administration in April, owing creditors around $137 million.

In January 2007, UK-based auditors Moore Stephens resigned after expressing concerns about $17.6 million worth of loans made to sister companies and subsidiaries in the UK and abroad – and named Balinder, or ‘Bally’ Chohan as the personal recipient of an “unlawful” $1.872 million loan from UKLI.

“The company had loaned 553,002 pounds ($1.1 million) to Bally Chohan. As he was then a director of the company, the loan was unlawful,” the auditor said in a formal letter explaining its decision. “By September the loan had risen to £957,732 ($1.9 million).”

Now Chohan is CEO of a Dubai-registered company called UK Capital Investments Group (UKCIG), with offices on Al Wasl Road.

Chohan was disqualified in April 2008 for four years for his “unfitness to act as company director”, according to Companies House records.

Investors in the UK bought small plots of farmland from UKLI in the expectation that it would attain planning permission for housing and increase in value as a result.

“Potentially there could be claims of up to 70 million pounds ($137 million),” Lee Manning of administrators Deloitte told BBC Radio 4 last week.

“However the assets we have in the company at the moment, if we realise the properties that we have, could produce as little as two or three pence in the pound, if all the investors were able to claim.”

Before it went into administration, UKLI records indicate that approximately 5,000 plots of land were sold to investors, spread over several locations.

On its website, UKCIG lists itself as an affiliate of UKLI and says that it has “a substantial land bank under management in the wealthy south east of the UK”.

The website adds: “The land has been identified by personnel with in-depth planning expertise as having a strong probability of being rezoned from agricultural to developmental use… The UK’s tight planning controls result in a substantial uplift in value when land achieves allocation.”

On the website of another Dubai-based UKLI subsidiary, UKLI International, a statement reads: “UK Land Investments International is solely for International clients based in the GCC, Middle East, Canada and Asia. The products of UK Land Investments International are not to be marketed to persons in the UK or the USA and as such does not fall under the jurisdiction of the FSA, OSC or the SEC.”

Balinder Chohan did not answer calls made to his mobile phone on Tuesday evening.

According to Dubai real estate watchdog RERA, UKCIG is currently developing the Metropolis Lofts complex in Jumeirah Village South. The project’s master developer is Dubai Government-owned Nakheel.

“Due to issues of confidentiality, it is our policy not to discuss relationships with or the business of investors,” Nakheel told Arabian Business in a statement on Tuesday.

“All investors must comply with Dubai’s laws and regulations including the Dubai Property Law and Escrow Law.”

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