When corruption strikes Dubai
ANALYSIS/OPINION: When corruption strikes Dubai
One of the problems that keeps developing nations from developing is corruption. When crooked leaders don’t honor deals with foreign investors, it scares away potential future ones. Also, they leave their country in poverty. Alas, this isn’t just a problem for Latin American banana republics or oil-rich African nations. This is even a problem for so-called middle powers like the UAE, where a Canadian investor was apparently the victim of the largest fraud case in Middle East history.
Many local leaders, notably Sheikh Mohammed Bin Rashid of Dubai, have gone out of their way to welcome global investors. However, he seeks to enrich all sides and diverse the UAE’s economy beyond oil. Emiratis didn’t build the Burj Khalifa just to be tall; they built it as a beacon to the world. But some malfeasance from an elite Saudi family is jeopardizing the Emiratis’ hard work.
To contribute to Dubai’s real estate boom in the early 2000s, Omar Jamal Ayesh, a Canadian businessman, founded Tameer Holding Investments in Dubai, partnering with members of the powerful Al Rajhi Saudi family at the peak of its success in 2005. The family has massive influence throughout the Gulf Coast. The five Al Rajhi brothers include Abdullah, chairman of both Al Rajhi Holding and Al Rajhi Bank — the world’s largest Islamic bank — and Ahmed, recently appointed as Saudi Arabia’s Minister of Labor and Social Development and chairman of the Kingdom’s Chambers of Commerce.
In 2007, the company had become wildly successful, with the Gulf International Bank evaluating their property portfolio as $5 billion USD before a proposed IPO valuing Mr. Ayesh’s 25 percent share at $1.25 billion, and continued growth would have made for yet another amazing Dubai success story. But the Al Rajhi brothers had other ideas for Mr. Ayesh’s share of the company he’d built.
The Al Rajhi family fraudulently transferred or “sold” Tameer assets to shell companies they owned, to demolish the value of Tameer overall. Ayesh’s quarter share and the hundreds of deposits made by foreign investors were sold. The Al Rajhis’ actions constitute financial fraud, embezzlement, conflict of interest, breach of fiduciary duty, and misappropriation of assets — all as part of a pattern of racketeering activity.
Reposted from washingtontimes.com https://www.washingtontimes.com/news/2019/jun/17/dubai-real-estate-scandal-threatens-business-for-b/