Investors positive on Dubai Bank’s takeover

Dubai’s government action to bail out one of its Islamic banking lenders was positively received by investors this week. Such move indicates that the emirate is in a position to rescue distressed state-linked businesses.

A day after Dubai Bank’s takeover, the Dubai Financial Market gained nearly 1 per cent, followed by a more modest 0.7 per cent gain on Wednesday.

Emaar Properties, whose 30 per cent shareholding of Dubai Bank valued at Dh172m ($47m) will be dilluted, even has rallied more than 3 per cent since the statement. Eventually, Emaar will have to write down the value of its investment in Dubai Bank completely. However, investors were relieved that the property developer would not have to contribute to the bail-out. Read more

DIFC Courts have Limited Jurisdiction over Property Disputs

Judge Sir Anthony Colman has thrown out a case brought by an investor against Damac Properties because the Dubai International Financial Centre (DIFC) Courts does not have jurisdiction over the claims. Union Properties is also contending that the DIFC is not the correct venue for the case of 31 investors against failed against the developer, according to the DIFC Courts registry.

Lothar Hardt, a German investor, alleged in the original filing that Damac and four individuals had broken their contractual agreements and several laws by failing to deliver the property projects on time, mismanaging escrow accounts relating to some of the projects, and not registering the transactions with the Dubai Land Department. Mr Hardt had paid US$9.7 million (Dh35.6m) as downpayments for the purchase of 37 properties in five developments: Park Towers, Water’s Edge, Lotus Residences, Wildflower and Ocean Heights. He sought the return of his investment, as well as damages and lost profits, court documents show. Read more

Computer reseller in Dubai inks out-of-court lucrative deal with Microsoft

More settlements expected as computer reseller respond positively to nationwide anti-piracy campaign

Microsoft Gulf has announced that Dubai-based computer reseller Storm Computers has agreed to an out-of-court civil settlement, following a raid on the store a few months earlier.

Storm Computers was purportedly found to be selling personal computers loaded with pirated versions of Microsoft® software. Pirated CDs were also seized during the operation and two Storm employees were arrested. Under the terms of the civil settlement Storm Computers will only sell and distribute genuine Microsoft software to their customers in the future. Both parties also agreed to an undisclosed amount of damages. Read more

Dubai regulator orders Damas to dismiss board

The Dubai Financial Services Authority ordered jeweller Damas International to discharge its board and pay penalties, citing irregularities involving cash and gold, Gulf Daily News reported. The watchdog said that an investigation revealed that Damas’s board did not exercise appropriate governance after key executives drew down reserves without approval. The authority noted that the Abdullah Brothers, who it named as Tawhid, Tawfique and Tamjid Abdullah, owed the company $99.4 million cash plus the value of 1,940kg of gold, which is estimated to be worth nearly $71 million at market prices. The regulator’s clampdown underlines a lack of transparency and disclosure in Damas and among some family-owned businesses in the region. Dubai’s watchdog said that this action will remind directors of public firms that they owe a duty to the company and their shareholders, which supersedes any duty they have to their private interests.

Desert Storm or The Latest Scandal involving Property Developer in Dubai

According Reuters, in the beginning of February, Al-Fajer Properties announced a 3.2 billion dirham ($871.2 million) restructuring of its operations. Under the leadership of its new president, Sheik Maktoum bin Hasher Al Maktoum – the eldest son of the company’s owner – the company had liquidated its land bank and sold off its remaining inventory after a “rigorous” business review in order to strengthen its balance sheet.

Later sources close to Al-Fajer told America’a leading business magazine Forbes that the restructuring was actually a wholesale “rescue” from financial ruin as an independent entity, after nearly three years of alleged mismanagement under former manager Shahram Abdullah Zadeh, businessman from Iranian origin. Read more