Last month, the UAE attorney general announced a “major” investigation into alleged financial violations at the company
A United Arab Emirates prosecutor has ordered the detention of the chairman of Dubai-based Union Properties pending an investigation into alleged financial violations at one of the country’s biggest developers.
Khalifa Al Hammadi’s detention was requested by the Federal Public Funds Prosecution and “the case is still under investigation,” the company said in a stock market disclosure, citing a letter from the authorities.
A spokesman for Union Properties declined to comment when contacted by Bloomberg on Tuesday.
Last month, the UAE attorney general announced a “major” investigation into alleged financial violations at the company, sending its shares into a tailspin.
The probe followed complaints by the market regulator, the Securities and Commodities Authority, alleging violations by the company’s board chairman and other officials.
The allegations include the firm selling property at less than its real value and suspected violations of accounting standards systems to hide losses.
While many Dubai builders and developers have been beset by accusations of wrongdoing, probes of listed companies are rarely disclosed by local prosecutors.
In a statement to Dubai’s bourse last month, Union Properties said a property that was sold for Dhs30m ($8.2m) in March 2020 had previously been valued at Dhs49.5m “before the spread of the Covid-19 pandemic and its accompanying negative effects.” It was bought by a woman who shares the chairman’s last name, according to the statement.
It wasn’t clear if there was a relation between the two.
Once among the main developers that shaped Dubai, Union Properties struggled to repay its debts in the aftermath of the emirate’s crisis in 2009 and has never fully recovered.
Its shares are up 16 per cent so far this year after rebounding from October’s collapse, giving the company a market value of $380m.
