Tuesday, 11 August 2009

More details emerge on the Sunland/Dubai Waterfront stoush.

More details on the Court documents filed by Sunland in the Federal Court of Australia (Queensland Registry) as part of their claim against Messrs Joyce and Lee. Joyce and Lee are both currently in jail in Dubai. The article also includes what seems to be the now obligatory mention of Geelong Grammar. What's with that?
Source: Sydney Morning Herald 12 August 09
Sunland Group says two developers misled it about their friendship and the rights to a block of land, write Rick Feneley and Royce Millar.
When three Australians started haggling over a $63 million plot of land in Dubai, one says the other two kept him in the dark.
David Brown, who was leading the Dubai branch of the James Packer-backed Sunland Group, says the developers Matt Joyce and Angus Reed omitted to tell him they were friends. Nor had they mentioned that this friendship went back to their school days at Geelong Grammar.
Worse, Brown says Joyce and Reed misled him over a block of land that Sunland wanted to buy in the Dubai Waterfront development, a colossal, futuristic ''master community'', of which Joyce was general manager. Brown claims the pair led him to believe that Reed and his Melbourne-based company, Prudentia Investments, had rights over this block, the prosaically named Plot D17.
Prudentia had no such rights, a Dubai authority would tell Brown later. Prudentia did not own the plot; nor had it clinched any option to buy it. So it had nothing to sell, Sunland alleges.
Instead, Brown was told, he should have negotiated directly with the land's owner, Nakheel, the government-owned developer and parent company of Dubai Waterfront, Joyce's firm.
The penny dropped too late for Brown, Sunland alleges. By now it had already bought Plot D17 and paid Reed's firm a $14 million ''consultancy fee'' for releasing the land.
This is the essence of Sunland's allegations against Joyce and Reed, contained in a statement of claim lodged in the Federal Court in Brisbane this week.
Joyce and his Australian colleague at Dubai Waterfront, Marcus Lee, are in jail in Dubai awaiting trial for alleged fraud in relation to this deal. Reed - branded a fugitive by Dubai - is back in Melbourne, still a director of Prudentia. Reed's lawyers would not comment yesterday on the Sunland document, which alleges he and Joyce were misleading or deceptive, or reckless as to the truth. But Prudentia, which Sunland is also suing, has said previously that it ''at all times acted properly and with integrity'' and was surprised by Sunland's action.
Joyce's lawyer, Martin Amad, says his client denies all the allegations against him and will defend them vigorously.
The Sunland statement says Brown, then its chief operating officer in Dubai, met Joyce several times between March and July, 2007. Brown had asked Joyce if any waterfront land was available for purchase within his project. Each time, Joyce had responded there was none left; it had all been sold to secondary developers.
But on August 15, 2007, Brown says he met a Dubai Waterfront executive who told him a new plot with beach views would be created under a planned ''reconfiguration''. However, it was already ''taken by Angus Reed''.
Later that day, Joyce called Brown and said Reed was the contact point and that the plot could be bought at 135 United Arab Emirate dirhams ($44) a square foot; a property speculator was likely to pay 175 dirhams.
The next day, Brown called Reed in Australia. Reed suggested a joint venture to develop the land. Four days later, when they met in Dubai, Reed allegedly told Brown he could obtain the price of 135 dirhams a square foot from Dubai Waterfront, but ''I want compensation'' of 40 dirhams a square foot. He allegedly added that it would be more tax-effective to pay this as a fee to Prudentia for ''consultancy services''.
On August 29, Sunland's statement alleges, Joyce called Brown and said words to the effect: ''Sunland should come to an agreement with Reed as soon as possible because there were other buyers around, including Russians, who might offer Reed 220 dirhams per square foot or more for the land.''
Lee and Dubai Waterfront's senior legal counsel, Anthony Brearly, met Brown on September 12. Brown says one or both of them - he cannot be sure which - said ''you should immediately put your foot on the plot''. On September 19, 2007, the deal was done. Rather than a joint venture, Sunland would buy the whole plot. Reed accepted its offer of a flat fee of 20 million dirhams to buy Prudentia's right over the land, but Sunland agreed to an addition.
It alleges Reed negotiated a reduced sale price of 120 dirhams a square foot - and the saving would go to Prudentia as a ''land uplift fee''. Dubai Waterfront would compensate Sunland for that uplift fee by allowing it to increase the density of its construction. Better still, Dubai Waterfront would waive the entire purchase price if Sunland could complete the project within four years. Sunland has yet to turn a sod on the site.
After the deal, Prudentia arranged for its consultancy fee of 44,105,780 dirhams to be paid to a new subsidiary in Singapore, Hanley Investments.
On December 1 last year, the Sunland statement alleges, the director of Dubai's Financial Audit Department told Brown that Reed and Prudentia had no right to sell the land. On January 21 Dubai police interviewed Brown. Four days later, they arrested Joyce and Lee. Reed is believed to have been out of Dubai at the time. After six months in custody, Joyce and Lee were charged with fraud last month. Only then did police hand back the passport of Brown, who had been assisting them.
Sunland is suing Joyce, Reed, Prudentia and Hanley Investments.

1 comment:

  1. Hello Carolynn. I hope you are going to post the story in the Sydney Morning Herald datelined 11 Feb 2010 headlined: Sunland 'misled the ASX' in Dubai case. The link is here: http://www.smh.com.au/business/sunland-misled-the-asx-in-dubai-case-20100210-nsf9.html. Regards, ConcernedAussie