Photo: Dubai Properties website
Hashim Al Dabal, chairman of Dubai Properties LLC has been arrested on suspicion of embezzlement at the state-owned company that’s in merger talks with Emaar Properties PJSC, the emirate’s attorney general said.
“Mr. Al Dabal is accused of abusing his position and earning millions in illegal profit,” Attorney General Essam Essa al-Humaidan said in a phone interview today. “We are questioning him almost daily and Mr. Al Dabal indicated he is ready to answer questions without having a lawyer present.”
Emaar, the United Arab Emirates’ biggest real-estate developer, said last week that talks are progressing on a merger with Dubai Properties and state-controlled Sama Dubai LLC and Tatweer LLC. Authorities in Dubai have arrested officials at property companies since beginning an investigation into corruption last year. They include Deyaar Development PJSC’s former CEO, Zack Shahin, and Adel al-Shirawi, former chief of mortgage lender Tamweel PJSC.
“This clearly creates a distraction for the planned merger,” Saud Masud, a Dubai-based analyst at UBS, said by telephone. “It also raises questions on the need for more due diligence beyond the financials for Emaar and it may end up becoming a catalyst for a management reshuffle.”
Bloomberg calls to Dubai Properties seeking comment weren’t answered today, a weekend day in the United Arab Emirates. Al Dabal hasn’t appointed a lawyer and only family and legal representatives are allowed to talk with him, al-Humaidan said.
Al Dabal was arrested about 10 days ago, the attorney general said. No arraignment date has been set and the investigation is continuing, he said. Under Dubai law, he can be held for 21 days, after which he must appear before a judge.
Dubai Properties is a unit of Dubai Holding LLC, a group owned by the emirate’s ruler, Sheikh Mohammed Bin RashidAl Maktoum. In August, Al Dabal was appointed as executive chairman at Dubai Holding’s newly created Property Vertical unit.
The proposed merger with Emaar is aimed at controlling the supply of new buildings amid a glut of homes that drove property prices in Dubai 50 percent lower. The combined entity will have 13.4 billion dirhams of debt and 194 billion dirhams of assets, Emaar said on Oct. 22.
Dubai Properties built Jumeirah Beach Residence, a 1.7- kilometer (1.05-mile) waterfront development that includes 36 residential towers, four hotels and retail space.
Al Dabal is being held at a detention center in Dubai police headquarter, al-Humaidan said.
“We’re still trying to determine the extent of Al Dabal’s misconduct,” he said. “When the investigation is complete, all details will be announced.”
The investigation is being “conducted swiftly and, God willing, it will be concluded soon,” he said, adding that Al Dabal will be allowed to meet with a lawyer as soon as he appoints one and his family is allowed to visit him.
Emarat Al youm reported earlier today that Al Dabl had been referred for prosecution on suspicion of financial misconduct. It cited Yasir Amerey, the head of the financial supervision department at the Ruler’s Court.
Dubai Holding appointed Ahmad bin Byat as acting chairman, Zawya Dow Jones reported yesterday, citing the company.
“Dubai Holding and all of its business entities are committed to the highest levels of corporate governance. As such we fully support the Dubai government’s initiatives to uphold these standards,” Zawya Dow Jones cited the company as saying in a statement.