Details of accusations of financial irregularities against “Union Properties” officials

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The Public Funds Prosecution in the Emirates has launched extensive investigations with officials of the Union Properties Company, which is listed on the Dubai Stock Exchange, based on a complaint from the Securities and Commodities Authority.

Hamad Saif Al Shamsi, Attorney General of the State, said, in statements carried by the official news agency, that the complaint included information about financial violations committed by Khalifa Hassan Al Hammadi, Chairman of the Board of Directors of the company, and others in conjunction with some of its officials.

Most notable accusations

(According to the text of the statements of the Attorney General)

Selling one of the real estate company’s assets at a price lower than its real price, and deceiving the name of the beneficiary from buying it with forged papers.

Abuse of authority and fraud.

Damaging the interests of the company and its shareholders by entering into investments outside and inside the country without a real study, which incurred financial losses.

– Violation of the company’s officials with the accounting standards systems to hide the loss incurred by the company by changing the classification of its investments.

In the statement, the State Prosecutor said that the Public Prosecution is conducting investigation procedures under his direct supervision.

He added that the properties of some of the defendants were seized and they were prevented from traveling, and that the legal status of the contracts, deals and procedures initiated by the defendants was being examined and subjected to technical examination by specialists with the participation of the Securities and Commodities Authority and law enforcement agencies, and summoning all those proven responsible.

What is the company’s response?

Union Properties issued a statement published on the Dubai Stock Exchange website, in response to the accusations published against it.

The company said that the real estate asset referred to by the accusations, is an apartment building, which it had purchased in 1997 for 36 million dirhams ($9.8 million), and is recorded in its books at a value of 49.5 million dirhams ($13.5 million) in its 2019 financial statements.

The company indicated that the value of the building recorded in the financial statements “was before the Corona crisis and its accompanying negative effects,” and that the company sold the building for 30 million dirhams ($ 8.2 million) in March 2020 after studying several offers to buy to a party that the company said was not related. As part of its plan to restructure its debts, which includes the payment of cash installments.

On August 10, 2020, Union Properties announced the signing of an agreement to restructure all of its debts with Emirates NBD, amounting to 946 million dirhams (257.6 million dollars), according to a previous statement.

For more on the settlement agreement: UAE Union Properties agrees to restructure its debts with Emirates NBD Bank

The company stated in a statement today, that it is obligated to pay a number of cash installments as part of the debt restructuring plan, and that it has sold a group of assets for approximately 161 million dirhams ($43.8 million) to create cash flow, which, along with other revenues, contributed to the payment of approximately From 175 million dirhams ($ 47.7 million), representing 12% of loans.

The company indicated that the payment of these dues contributed to reducing financing expenses during the year 2020 by approximately 31% compared to the previous year, and gave the company the ability to launch new projects.

Company Profile

Founded in 1993, it is one of the largest real estate development companies in the UAE, and is listed on the Dubai Stock Exchange, and one of its most prominent projects is Motor City in Dubai, according to its official website.

(Prepared by Abdel Qader Ramadan and Abdel Qader works on the Masrawy Al-Masry website and previously worked in several institutions, including the Thomson Reuters Foundation’s Aswat Masriya website, the Egyptian Stock Exchange, and the Egyptian CBC satellite channel)

(Editing: Yasmine Saleh, contact: [email protected])

© ZAWYA 2021





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