Australian developer Sunland has seen around half of its profits for its financial year wiped out by the failed legal pursuit of two jailed Dubai property executives.
In its financial statement, the firm said $5.7m would be set aside to pay the legal costs of ex Nakheel managing director Matthew Joyce and Angus Reed after Sunland last month lost an appeal in the high profile case, which was in relation to a failed Dubai Waterfront property deal.
Sunland’s profit guidance for financial year is $12m, about half of that expected.
Three judges comprehensively rejected as “groundless” an appeal by Sunland, which claimed Joyce and Reed duped it into paying about $14m to another Australian company, Prudentia, to secure a development plot known as D17, which was part of the Nakheel development.
It accused Joyce, as Dubai Waterfront's general manager, and Prudentia's Reed, of falsely claiming that Prudentia had rights over D17.
The developer brought parallel cases against the men in Victoria, where it lost, and Dubai, where it won.
In May, the Dubai Ruler’s Court found both men guilty (Reed in absentia) on charges of fraud and sentenced them to 10 years’ jail. Joyce also was fined $25m.
A third man, Marcus Lee, who was held under house arrest in Dubai for four years, was found not guilty.
Joyce, who remains under house arrest in the emirate, is appealing the decision.
In the Australian court’s original finding, three judges called Sunland’s executives "unreliable witnesses" and accused them of having an ulterior motive.