Aussie businessmen granted bail after 9 months in Dubai jail

Source: Sydney Morning Herald 21 Oct 09 
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Two Australian businessmen have been granted bail after languishing in a Dubai jail for nine months on suspicion of fraud.
Melbourne man Matt Joyce, 43, and his colleague Marcus Lee, 40, of Sydney, were arrested in January after working for three years for the Nakheel company's multi-billion dollar Dubai Waterfront development.
Their arrests came as the global financial crisis hit the local property market hard.
The pair were held in jail for six months before charges of misappropriation were laid.
Last month an independent judge finally assessed their applications and granted an application to hear their case.
Joyce's Australian lawyer Martin Amad said his client was due to be released from prison in the next few days while Lee is also due for release shortly.
The co-accused will be required to hand in their passports once released ahead of the first witness appearance on November 17.
Legal processes in Dubai are primarily controlled by the prosecution, Mr Amad said.
"There's no time limit as to which a prosecutor needs to provide a file," he told AAP.
Joyce will spend time with his wife and three children before concentrating on preparing his defence with his local legal representative.
"We've got confidence he'll be found innocent.
"His wife is over the moon and can't wait to have him back in the home."

Aussies refused bail in Dubai Court hearing

The 'Gulf News' uses initials for defendants' names in their reports.
Source: Gulf News 15 Sept 09
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Waterfront's former executive director and ex-operations manager were refused bail by a court yesterday after they denied the charge of unlawfully gaining Dh44.1 million.
With his arms folded, the 43-year-old Australian former executive director, M.J., repeatedly said: "No!" four straight times when he pleaded not guilty before the Dubai Court of First Instance.
His 40-year-old compatriot ex-operations manager, M.R., said: "No!" four times in the same manner when he denied his charges at courtroom nine in front of Presiding Judge Al Saeed Mohammad Barghout.
Lawyers Salem Al Sha'ali and Ali Abdullah Al Shamsi, who are defending M.J. and M.R., respectively, told the judge that there are no more reasons to keep their clients in provisional detention.
The advocates said their clients' passports have been confiscated and asked the judge to bail the defendants.
The Public Prosecution charged M.J., M.R. and Waterfront's former legal adviser, 44-year-old Australian A.J. (who is at large), with abusing their jobs as public servants and intentionally damaging the interest of Nakheel's Waterfront project by unlawfully earning Dh44.1 million, out of which Dh22.1 million went to M.J.
According to the bill of impeachment, a fourth Australian escapee, identified as A.R., collaborated with the former Waterfront executives.
Prosecutors charged M.J., M.R. and A.J. with abusing their jobs when they managed and promoted Dubai Waterfront lands for sale and gained an illegitimate profit.
Public Prosecution records claim the Australians swindled and misappropriated Dh44.1 million from a Dubai-based property developer.
The defendants allegedly claimed to the developer's Australian manager, D.B., that one of the lands at the Waterfront project belonged to an Australia-based company, which is owned by A.R. The defendants claimed that the land had been reserved for A.R.'s company. Prosecutors claimed that the defendants deceived D.B. and lured him into paying Dh44.1 million and obtain a waiver over the ownership of the land to be able to buy it.
During yesterday's hearing, advocate Eisa Bin Haidar represented the property developer and D.B., who is claiming Dh20,000 in temporary compensation.
Al Sha'ali argued in court: "Since this case surfaced nine months ago, we submitted a document that confirms that the defendants reserved the land for the Australia-based company. Prosecutors failed to face prosecution witnesses with that document because eventually it corroborates that the suspects didn't have any criminal intention&"
Presiding Judge Barghout rejected the bail requests and adjourned the case until October 22.

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
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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.

Sunland claims Dubai developer sought $38m kickback

From The Australian 11 August 09
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The Packer family-backed property company Sunland has claimed that a Melbourne developer and his old school mate from Geelong Grammar conspired to defraud the company in a complex transaction on the Dubai waterfront in 2007.
Documents filed yesterday in the Queensland registry of the Federal Court give details of a case involving Australians Matt Joyce and Marcus Lee, who were employed in 2007 on the Dubai Waterfront project, and Melbourne-based property developer Angus Reed, who went to Geelong Grammar with Mr Joyce.
The documents allege that Mr Joyce and Mr Reed, who were well-known to each other, failed to give any indication of this relationship to Sunland's representative in Dubai, David Brown, when he was negotiating to buy land in the Dubai Waterfront, then one of the world's most expensive projects.
The documents claim that Mr Joyce had told Mr Brown that Mr Reed had purchased a valuable piece of waterfront land and that Sunland had paid Mr Reed over $14 million for the right to buy the land, even though Mr Reed had never actually owned it or had rights to buy it.
They claim that in mid-2007 Mr Brown had asked Mr Joyce if there was any waterfront land left in Dubai, and a representative of Dubai Waterfront told him that an existing block was being reconfigured to create a new block, D17, which would have water views.
In August 2007, Mr Joyce allegedly told Mr Brown that Reed had already bought D17, and had secured it at $50 per square foot, well below the going rate in the area, which was around $57.
Mr Joyce gave Mr Brown the contact numbers of Mr Reed, who claimed that he was in the process of purchasing the land, but was willing to enter an agreement with Sunland to develop it.
Mr Brown allegedly received further phone calls from Joyce urging him to move quickly or the land could be purchased by "the Russians" for a considerably higher price. In September 2007, Mr Lee, a project manager at Dubai Waterfront, and lawyer Anthony Brearley from Dubai Waterfront, phoned Mr Brown to say they were concerned that "marketing people will sell plot D17 and we will have no control over this".
But Mr Reed and Sunland were unable to come to terms on purchasing the land, so Sunland offered to purchase Reed's company's rights to D17 for $6.5 million, plus the difference in property value for the area between the going rate and the price Reed was able to negotiate, a total of $14.3m.
But the documents also claim that in December of that year, Sunland's Mr Brown was told by officials from the Emirates audit office that Mr Reed had never purchased the property in question, and there had been no reason why Sunland could not have purchased the property in their own right.
The documents allege that if Mr Joyce and Mr Reed -- who failed to tell Mr Brown of their relationship -- had not made the representations, then Mr Brown would not have entered into negotiations with Mr Reed, and instead would have negotiated directly with Mr Joyce for the purchase of D17.
It also alleges that "Joyce and Reed both knew that their representations were false, or were reckless as to their truth or falsity".
Mr Reed has skipped the country and is in Melbourne, while Mr Joyce and Mr Lee, who is from Sydney, have both been kept in detention in Dubai for the past year.
Gold Coast-based Sunland has James Packer on the board, but has taken a beating in its Middle East property deals as the market has dived.

Dubai bribery case: Shaping up to be a bitter public brawl

This is shaping up to be an enthralling, and very public, brawl. As a commenter on an earlier posting pointed out, this matter will be open to public gaze once it starts to process through the Australian Courts. If the Court case captures the public imagination, as it no doubt will, it will take on a life of its own. No matter what the eventual outcome, Dubai's reputation, in Australia at least, will be severely damaged, mud will be slung and some of its going to stick.
Source: Sydney Morning Herald 27 July 09
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FOR more than 150 years, Geelong Grammar has provided its privileged graduates with the keys to success in an Anglo-dominated Australia. But for the Old Grammarian classmates and property industry figures Angus Reed and Matt Joyce, some training in doing business in more exotic places like the United Arab Emirates might have been more useful.
The Herald can reveal that Mr Reed, a Melbourne-based developer, has emerged as the mystery man at the heart of a Dubai property deal gone bad; a transaction that has left Mr Joyce and and another Australian executive, Marcus Lee, languishing in prison for six months and facing trial for fraud.
Mr Reed and an Australian lawyer, Anthony Brearley, are believed to have left Dubai before a police investigation, thus avoiding jail. Well-placed sources last night confirmed that Mr Reed and Mr Brearley have been declared "fugitives" in Dubai and will be tried in their absence.
The Herald also understands that the James Packer-backed developer Sunland Corporation has Mr Reed and Mr Joyce in its sights as it prepares civil action to recoup millions it says it lost on the deal.
Like thousands of their colleagues, Mr Reed and Mr Joyce ventured to Dubai a few years ago in search of riches. The dream turned sour last year for Mr Joyce in particular, when the emirate's "miracle" property boom proved to be a very fragile bubble.
Until his arrest in January, Mr Joyce had been managing director and Mr Lee a senior executive of Dubai Waterfront, a subsidiary of the state-owned Nakheel Corporation. It is the world's biggest waterfront development.
Important to the charges against Mr Joyce and Mr Reed are payments allegedly made by Mr Reed's Australian company, Prudentia Investments, to a bank account in Jersey held by Mr Joyce. Both men are expected to insist that any such payments were unconnected with the Dubai property deal in question.
A source close to Mr Reed says he is deeply upset by his mate's predicament but has not returned to Dubai for fear of being arrested.
At the core of the row is the sale in 2007 of a parcel of development land by Dubai Waterfront to Sunland. Prudentia is believed to have partnered Sunland in the purchase of the waterfront site. But Prudentia sold its share of the project to Sunland as the boom continued through 2007. Now Sunland has put development of the site on hold and says it is the victim of fraud.
It has made a formal complaint to Queensland police and the Australian Competition and Consumer Commission. The Herald understands the company names Mr Reed, Mr Joyce and Mr Lee.
One source close to one of the families said the saga had led to tension between the two old school friends, a suggestion rejected by a spokesman for Mr Joyce.
Mr Joyce and Mr Lee insist they are innocent. Australian business sources have complained that the two became scapegoats amid the property collapse in Dubai, where "commissions" or kickbacks have been commonplace.
The Dubai prosecutors and Sunland, which has billions at stake in Dubai, see things differently. Sunland has stated publicly that it will seek "civil remedies in respect of the alleged fraud".
It has repeatedly stated that it is co-operating fully with the Dubai authorities in its investigation of Mr Joyce and Mr Lee but has denied being behind the police action against them.
Any civil action will be taken in Australia, not Dubai. But in what is shaping up as a bitter stoush, with big-name lawyers such as Robert Richter (QC, William Crockett Chambers in Melbourne and barrister for underworld gunman Mick Gatto) likely to be throwing the punches, the case is set to open a rare window into the opaque world of business and government in a country dominated by its ruler, Sheikh Mohammed bin Rashid al-Maktoum.
Mr Reed is well-known in property circles, including as an adviser to the Nauru Government in the 1990s, when it lost a fortune on the Melbourne property market.
Those who know the two men say Mr Joyce is quiet and cautious while Mr Reed is more entrepreneurial and daring. It is counter-intuitive, they say, that Mr Reed is now a free man at home in Toorak while Mr Joyce sweats it out in a Dubai jail.
After a thorough vetting by Mr Reed's lawyers, Prudentia issued a brief written statement. The lawyers would not allow Mr Reed to be quoted. Instead, a company "spokesman" said: "Some years ago, the Prudentia group, through its Singapore-based subsidiary, was involved in a transaction which we understand is the subject of the investigation by the Dubai authorities.
"The Prudentia group has at all times acted properly and with integrity and is concerned and surprised that there would be any allegations of wrongdoing against representatives of any of the parties involved in the transaction."
Mr Joyce's Melbourne lawyer, Martin Amad, restated his client's innocence and questioned Sunland's motives. He said the land sale was a "legitimate business transaction that occurred prior to the global economic downturn. Sunland has subsequently incurred a huge loss on the project and has written down the value of the land substantially."
He added: "Shareholders of Sunland would hope that Sunland exercised due diligence prior to purchasing the land. After all, they would have their shareholders believe they are an experienced and sophisticated property developer."
He said that, contrary to previous reports, there had never been an allegation of Sunland paying consultancy fees to Dubai Waterfront.
Mr Joyce's wife and three children and Mr Lee's wife are still in Dubai, awaiting the outcome of the fraud trial.
Sunland did not wish to add to a written statement made to the Stock Exchange last week.
In a separate matter in Sydney last week, Prudentia refused to comment about its plans for the Waratah Park Earth Sanctuary, where Skippy the Bush Kangaroo was filmed in the 1960s, after the RSPCA put down two emaciated kangaroos at the closed park. State authorities say Prudentia has failed to obtain a licence to care for more than 100 native animals in the park since it took over the site in Duffys Forest, on the northern beaches, in 2006. Residents fear the company has let the site run down because it wants to build houses there.

Dubai bribery case: The Sunland Connection

An extract from an article in GoldCoast.com.au. The rest of the article has the same content as quoted in an earlier posting. This piece gives a bit more information on the local connection in the UAE.
The photo shows The Atrium, a, now cancelled, project in Dubai that seems to be at the centre of the story.
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"The upmarket Dubai Waterfront site at the centre of the allegations had been earmarked for a $1.6 billion tower which Sunland was developing in partnership with a company linked to golfer Adam Scott.
The project, which was abandoned in March, was to have marked the first stand-alone development for Sunland in Dubai without the backing of the ruling Sharjah royal family."
http://www.emiratessunland.com/

Packer-backed developer to sue Dubai pair

THE James Packer-backed Gold Coast developer Sunland Group has complained to police and the corporate watchdog about two Australians accused of fraud in Dubai, and is expected to take civil action against the men to recover losses from their alleged crime.
Sunland, in which Mr Packer is a key shareholder and non-executive director, has laid the complaints against Matthew Joyce and Marcus Lee, executives from the colossal Dubai Waterfront project. The two have been charged with fraud after being jailed for six months on suspicion of bribery.
The pair insist they are innocent and Australian business sources have complained they became scapegoats amid the bursting of the property bubble in Dubai, where "commissions" or kickbacks are commonplace.
But now Sunland, which has billions at stake in Dubai, has made a formal complaint about Joyce and Lee to Queensland Police and the Australian Competition and Consumer Commission.
In a media release yesterday, the day after the fraud charges were revealed, the company said: "Sunland understands that the charges relate, at least in part, to the purchase by one of its subsidiaries of a site from the Dubai Government-owned master developer Nakheel (Dubai Waterfront LLC), at Dubai Waterfront in October 2007."
It is understood that Sunland paid commissions to Dubai Waterfront, where Joyce was managing director and steering the world's biggest waterfront development.
Sunland's managing director Sahba Abedian said the company had been assisting Dubai authorities with their investigations since December 2008 and would continue to provide help when required. The company said it did not instigate the investigation into the executives.
Mr Abedian said: "Sunland has also taken steps to report the actions of certain individuals to the Australian authorities and we are investigating civil remedies in respect of the alleged fraud."
The statement did not name Joyce or Lee, but the company has confirmed that its complaint and action were against the executives, not Dubai Waterfront or Nakheel.
It is believed that any civil action will be launched in Australia, not Dubai.
Mr Abedian confirmed that Dubai authorities had returned the passport of David Brown, the Sunland's chief operating officer in the Emirates, now that the they had completed their investigation. He said Mr Brown was a witness and not a subject of investigation.
Joyce's lawyer, Matin Amad, said he was shocked by Sunland's action.
"No complaint about Joyce or Lee has been brought to my attention," he said yesterday afternoon. "I can't imagine any circumstances under which a complaint could be justified. The alleged offence occurred in Dubai, not in Australia. It sounds like they have an ulterior motive in doing this."
Mr Amad said the case against Joyce and Lee is weak. Joyce's wife and three children and Lee's wife are in Dubai, awaiting the outcome of their fraud trial.
Sunland said it only released the information now as it had not wanted to interfere with the Dubai investigation.
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Source: The Age, Melbourne 22 July 2009

Bidder's linked to Australian jailed in Dubai

The proposed Barangaroo site on Sydney Harbour. Graphic from NSW Planning site

From the Sydney Morning Herald, written by Rick Feneley and Carolyn Cummins
February 19, 2009

The Australian chief of Dubai's biggest property development company has refused to answer questions about two fellow Australian colleagues who have been jailed on suspicion of bribery.
Chris O'Donnell is the chief executive officer of Dubai's biggest property developer, the state-owned Nakheel, which happens to be part of a consortium bidding to build Sydney's $2.5 billion Barangaroo development. (The link to the Planning NSW planning report is here. As background, Barangaroo is a 22-hectare waterfront site at East Darling Harbour in Sydney, Australia. The Barangaroo site will become an office/apartment/hotel complex....hmmm starting to sound familiar? The site is named after the wife of Bennelong, after whom nearby Bennelong Point, site of the Opera House, was named. The demolition plan is below. )

Last month, Nakheel dumped Mr O'Donnell's Australian colleague, Matt Joyce, as the general manager of Dubai Waterfront, the world's biggest waterfront development, amid the global credit squeeze and a freefall in Dubai's property values. Soon afterwards, Joyce, 43, and a 44-year-old Australian colleague were arrested as part of a fraud and corruption investigation.
The pair deny any wrongdoing but are being held without charge, according to their lawyer, as are about 20 executives caught up in the investigation.

Joyce's wife, Angela, and their three young children are still in Dubai, anxiously awaiting his release, as are the other man's family. The Herald understands both men attended Geelong Grammar.

The Gulf News has reported the bribery claims against them involve 43 million dirhams ($18.2 million) but their Australian lawyer, Martin Amad, insists no bribe was paid. He also says no charges have been laid, despite consular advice to the Department of Foreign Affairs and Trade that the men have been charged with an ``economic offence''. Mr Amad believes meaning of the word ``charge'' has been lost in translation.

Two days after receiving an extensive list of questions from the Herald, Mr O'Donnell's Dubai office responded last night by saying it would be "inappropriate for us to comment on any of your queries".

Nakheel is the biggest stakeholder in the Australian property group Mirvac, with a 14.9 per cent. Nakheel and Mirvac are in a consortium bidding for Barangaroo with Leighton Projects and Macquarie Property Development and Finance.

Nakheel has put many of its dazzling Dubai projects on hold and sacked hundreds of staff, and the Herald asked Mr O'Donnell's office if the company was still committed to Barangaroo. It replied that "at this stage, based on current government guidance for the project, we are working with our consortium partners ... towards a comprehensive bid".

When Mirvac reported a $645.7 million loss on Wednesday, its managing director, Nick Collishaw, said: "We have spoken to Nakheel, as we do with our major shareholders, and they remain committed to investing in our group.

"The group is also committed to its joint-venture deal in Barangaroo."

The deadline for the bids is March 31. The other shortlisted bidders Lend Lease/Westpac Corporation and Brookfield Multiplex.

In Australia, Mr O'Donnell had been managing director of Investa Property Group, once Australia's largest listed owner of commercial property, and executive director of Westpac Investment Property Limited.

The Dubai bribery case makes the "Sydney Morning Herald"

From the Sydney Morning Herald
18 February 09

UNTIL his arrest for suspected bribery last month, Matt Joyce was in command of the world's biggest waterfront development, the most audacious project yet in Dubai Inc's high-rise fantasia.
Joyce, the Australian managing director of the state-backed Dubai Waterfront, boasted of its vital statistics in a recent interview. Stretching 30 kilometres, it would cover 14,000 hectares, making it twice the size of Hong Kong Island.

It would dwarf the emirate's famous World and Palms developments. It would reclaim six islands and involve shifting enough sand to fill Wembley Stadium three times every month. And it would become home to 400,000 people within five years.

"We have the luxury of creating this city on a blank canvas," said Joyce, who would oversee the construction of yet another space-age Atlantis rising from the Arabian Gulf.

But Dubai's blank canvas has become murky. Few of the world's property bubbles became as inflated as Dubai's, and few have burst so explosively in the global meltdown.

Joyce, 43, the former Sydney-based chief of the respected property group St Hilliers, was among five senior executives made redundant from Dubai Waterfront last month.

Then, on January 25, he and two Australian colleagues were taken in for questioning as part of a year-long crackdown on fraud and corruption among state-backed property developers and banks. One of the Australians, a 55-year-old man from Brisbane, was released. But Joyce and another Melbourne man, 44, are still being held without charge. Both have families in Dubai.

Last night, Sydney time, the prosecution was in court applying to extend their custody for another 15 to 30 days. Their Australian lawyer, Martin Amad, was there and told the Herald: "No charges have been laid and both men strenuously deny the allegations."

He said they were confident that authorities would soon determine their innocence based on documentation they had supplied. He would not name Joyce's colleague.

The men are among more than 20 executives in jail as part of Dubai's fraud and corruption investigation. All are yet to be charged, but some have spent almost a year behind bars. Dubai police have given no details on whom the Australians allegedly bribed.

Joyce's lawyer in Dubai, Salem Al Sha'ali, had told the Gulf News: "The suspected transaction cannot be considered a bribe. The figure isn't exact and the amount was given back because the deal didn't go through. It's a big misunderstanding."

Mr Amad said the quote, as reported, was inaccurate and he insisted there was no transaction and no deal. "No bribe was paid."

A former work colleague of Joyce's, from Australand in Sydney, described him as "straight and decent".

"If there's anything there, it would be totally out of character," he said.

For the 16 months before his shift to Dubai, in April 2006, Joyce was chief executive at
St Hilliers in Sydney. It is well known in the industry that he parted on unhappy terms, although his termination contract prevents St Hilliers revealing the reasons.

Joyce joined Dubai Waterfront, whose parent company is the government-owned Nakheel. Nakheel is the biggest developer in the United Arab Emirates and has projects worth about $US80 billion ($124 billion).

Asked how the Australians were being treated in jail, Mr Amad said they had no complaint. They were "anxious to be released" but there was slim chance overnight of bail.

Joyce had been made redundant shortly before his arrest. Asked if there were fears that the men were being made scapegoats for the broader corruption inquiry, Mr Amad said he could not comment. "It is not an argument we are putting forward."

Regardless of the case against the Australians, Dubai Inc is on trial in the eyes of the investment world, and the fraud crackdown has signalled the emirate's determination to send a clear message that it is a good place to do business.

Dubai property values are in free-fall. Some forecast they will drop by as much as 50 per cent this year.

Along with thousands of redundancies, local police reported at least 3000 cars abandoned outside Dubai International Airport in the four months to January. Many had keys in the ignition. It seems debt-ridden and jobless foreigners are fleeing Dubai.

Nakheel insists Dubai Waterfront is forging ahead.

Unlike the other emirates, Dubai has little oil to speak of. It has only its real estate, built on the whims of its rich and its rulers. Only on this can it guarantee its future as a global financial hub

More on the Dubai fraud investigation

Wednesday, Feb 11, 2009
Financial Times: by Simeon Kerr in Dubai

Authorities have detained senior managers at Dubai Waterfront, one of the emirate's most ambitious property developments, as part of an investigation into bribery allegations. The detentions come amid a series of emirate-wide probes into alleged fraudulent activity at state-backed property developers and banks that has rocked Dubai in the past 12 months.

One of those detained, Matt Joyce, was managing director of the vast waterfront project until he was made redundant last month. Dubai public prosecution records show that Mr Joyce, an Australian national, and two others have been detained for questioning in relation to allegations of bribery.

The Australian foreign ministry has confirmed that two of its nationals were detained after questioning on January 25.

Nakheel, the government-owned parent company of the Dubai Waterfront entity, said it had "no information" about Mr Joyce.

The arrest of more real estate executives will, however, increase investor concerns about probity among Dubai's big developers, which are shedding staff as they attempt to cut costs in the midst of a price crash. A year-long clampdown on corruption and fraud has left more than 20 executives in jail on allegations mainly surrounding the former management of developer Deyaar and its parent Dubai Islamic Bank, but also extending into other parts of 'Dubai Inc'. None has yet been charged and no trial dates have been set.

Nakheel, which is also the developer of offshore ventures and has an $80bn (€62bn, £54bn) portfolio of projects, admitted some staff had been detained for questioning on fraud allegations last summer.

Government-linked developers Sama Dubai and Mizin have also had executives detained on allegations of financial irregularities.

It is unclear to what extent these investigations are linked.

The sprawling graft probe reflects the seriousness which the government has placed on cleaning up the real estate sector, but concerns have also been raised that some suspects have now been detained for almost a year without charge.

Morgan Stanley estimates that $263bn of real estate projects in the United Arab Emirates have been delayed or cancelled because of the global financial crisis.

But Nakheel insists that the waterfront development, a reclamation scheme that is about 30 per cent complete, is not one of them.

A property lobbying group has called on the government regulator to prevent a complete collapse in the real estate market by cancelling projects such as Dubai Waterfront until demand returns. Twice the size of Hong Kong, Dubai Waterfront is located on the border with the neighbouring emirate of Abu Dhabi. It is intended to house about 1.5m people, which is roughly Dubai's current population, on reclaimed land and alongside excavated canals cut through the desert.

Mr Joyce's position was last month merged into a neighbouring project, Palm Jebel Ali, as the developer delayed other projects and made hundreds of staff redundant.

The moves were part of a broader streamlining initiative to allow Nakheel to cut costs ahead of the refinancing of a $3.6bn Islamic bond in November.

Property freefall

Dubai real estate, the darling of foreign investors since the ruler opened the door to non-Gulf ownership in 2002, has plunged into freefall since last autumn when the global credit crunch finally punctured the property bubble.

HSBC estimates that house prices fell 23 per cent between the third and fourth quarters of 2008.

Brokers say prices on some of the higher-end developments have plunged even further as speculators, who had been used to "flipping" properties for a quick return, seek to exit their investments.

About half of the emirate's developments have since been put on hold or cancelled.