Dubai’s real estate watchdog is investigating the Dubai operations of a disqualified UK property director whose firm collapsed, owing creditors around $137m.
Balinder Chohan was founder and sole shareholder of UK Land Investments Limited (UKLI) until it went into administration in April. Now he is CEO of a Dubai-registered company called UK Capital Investments Group (UKCIG), which according to its website offers land and property investment opportunities in the UK and Dubai.
“We are looking at UKCIG’s activities in selling plots in the UK, because we have been approached by investors in Dubai wanting to know how solid their UK investments are,” Marwan Bin Ghalita, CEO of the Real Estate Regulatory Authority, told Arabian Business on Wednesday.
“We are looking at [Chohan’s] activities and… we must be sure that he has approval and the right licences and everything,” he added.
Bin Ghalita stressed that RERA currently had no concerns over any UKCIG developments in the UAE itself.
Chohan was disqualified in April 2008 for four years for his “unfitness to act as company director”, according to Companies House records. The ban followed a three-year investigation by the Financial Standards Authority.
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. However, none of the land ever gained planning permission, and the FSA charged that UKLI operated as “an illegal collective investment scheme” and denied “investors protection for their money”.
On its website, Dubai-based 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.”
Before it went into administration, UKLI records indicate that approximately 5,000 plots of land were sold to investors, spread over several locations.
On Tuesday Arabian Business reported that Chohan had loaned himself almost $1.9 million from UKLI company funds before it went into administration, according to official documents.
The revelation is contained in correspondence obtained by Arabian Business from the former auditors of London-based UK Land Investments Limited, now in administration.
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).”
“There could be claims of up to 70 million pounds ($137 million),” Fiona Watson of administrators Deloitte told Arabian Business on Tuesday. “However, we have yet to agree the status of the investors and we are in the very early stages of the administration process.”
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