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Tue 22 Jan 2008 04:58 PM

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Nakheel issued writ against fraudsters six months ago

EXCLUSIVE: Firm took out injunction against Dutch broker using Palm name last year.

Nakheel has revealed it did know about PalmInvest and even took out an injunction against the Dutch real estate investment broker six months ago demanding the company stop trading using the Palm name immediately, the Dubai-owned property firm told ArabianBusiness.com on Tuesday.

Five PalmInvest officials were arrested by Dutch authorities Monday on suspicion of fraudulently selling bonds linked to property on the Palm Jumeirah, one of three palm-shaped islands Nakheel is building off the emirate's coast.

Nakheel previously stated it had never heard of PalmInvest, but on Tuesday said it was aware of a legal investigation being conducted out by Dutch authorities late last year.

The developer also said it would be contacting its lawyers about PalmInvest's continued use of its copyrighted material.

PalmInvest's website on Tuesday still showed computer-generated renditions of the Palm Jumeirah, despite the injunction requiring all copyrighted images and any associated marketing material be removed.

The site advertises bonds guaranteeing an annual 9% rate of return and offers customers the opportunity to "Invest in Palm Island in Dubai". Investors are asked to make a minimum investment of $75,000.

"We will have to get our lawyers to look at that again," said a spokesperson for the developer.

According to newswire AP, 90 financial investigators conducted raids on eight offices and five homes in the Netherlands and one in Monaco, seizing administration and luxury goods as part of the investigation into PalmInvest's activities.

The spokesperson said Nakheel would cooperate with any requests from the Dutch investigators.

The developer reiterated that it does not employ any third party sales agents either in Dubai or around the world. Anybody can buy property as long as they meet pre-qualification processes including credit checks, and appear in person at a Nakheel sales office in Dubai with their passport, the spokesperson said.

It would not confirm whether PalmInvest had bought property on any of the Palm islands or in any other of Nakheel's developments, which also includes The World archipelago.

PalmInvest lawyer Oscar Hammerstein said on Monday that a total of 28 million euros ($41 million) had been invested in Dubai property by the company.

Arabian Business: why we're going behind a paywall