By Andy Sambidge
Property developer chief at centre of police investigation after complaints.
Police are trying to track down the chief executive of a UAE-based property developer in connection with claims that $3.8 million worth of cheques issued by the company have bounced, it was revealed on Thursday.
Al Barakah, the group behind the development of the “tallest tower in Ajman”, as well as several projects in Dubai, enticed homebuyers with a guarantee of a 50 per cent profit in six months.
To convince them, the company issued post-dated cheques for that time period, UAE daily The National reported.
Police told the paper at least 14 million dirhams worth of those cheques have bounced and they have been unable to find the company’s chief executive, Imran Khan.
The status of the company’s developments, which number more than a dozen in Ajman and Dubai, remains unclear.
Al Barakah launched 15 projects in Dubai and Ajman since it began operating last year.
According to the cheques department of the Rashidia Police Station in Dubai, four cases have been filed by investors against Mr Khan by investors involving bounced cheques totalling 14 million dirhams and a fifth case is to be added involving cheques to a further nine million dirhams.
The officer told The National that police had visited Mr Khan’s house and found it closed and empty. He said police believed Mr Khan was in Dubai, but they had been unable to locate him.
Earlier this year, the company announced it planned to develop projects worth more than three billion dirhams in three years.
this is something very very shocking for investors in general and for property market in particular, such kinds of news are not going to help in any way. now the question is what RERA have to do in that case, if the developer has an escrow Account and all the funds were deposited in Escrow Account, should be refunded to the investors.
Well that piece of little news right there is bound to regain all the feelings of lost trust that people are experiencing for the property market!
What I do not understand is how naive can someone be to believe that Baraka is offering 50% return in 6 months.
This is only the tip of the iceberg, and I hope the Dubai judiciary will be in a position to bring them to task. Cheating people out of hard earned money is not on and I hope Dubai can make an example of this cheat if convicted. I have pity for the people who have no recourse to get their money returned
As somebody has commented this is just the tip of the iceberg. I recall this company offered fully paid trips to Canada for a T20 cricket championship to all those who bought apartments, only a couple of months back (I guess just before cityscape). At the point I was wondering, what kind of money these guys must be making on the properties. Anyhow, I think this has been allowed to go on for too long with no regulation. I think the Government should bring-in regulation, where the Developers should be regulated in terms of their capital, i.e. they should show a certain amount of capital to launch a project. And the people who invested, remember "buyer beware", investing is not being brave and putting all your money expecting to make a windfall!!! That's gambling. One should invest based on the risk return framework, that is the basic fundemental. If you stick to that you will not lose money.
The first one in line for the money from the Escrow account is the Gov't entity that sold the land to the developer, some 30% of the project, therefore most of the money in escrow will go to the Gov't and if anything is left then that will be what is given back to the investors.
Just FYI, AlBaraka are not registered neither in Dubai RERA nor Ajman's... it's just a RAK Free Zone offshore company. Kiss the money goodbye and be smart next time.
this is unbelieable. Govmt should take passports of all these developers and stop them from running away. Also force them to bring the money back from whereever they are hiding it.
Honestly, if you believe promises of 50% in 6 months, you might as well buy these magic beans I am offering. Sadly lots of people in the UAE appear to have believed in magic beans. I would be surprised if this guy is still in the country as they suspect. It seems that such a 'business' could not possibly succeed and that it was always likely to end like this.
There are so many developers who are not yet registered with Rera and they might do the same as this. The UAE Gov't should pass a law making it mandatory to register with RERA to avoid fraud and safe overseas investment.