DUBAI: The chairman of Dubai-based real estate developer Union Properties was dismissed from the company’s board on Tuesday, a day after the firm disclosed that a top prosecutor in the United Arab Emirates had called for his detention amid an investigation into alleged financial wrongdoing.
Khalifa Hassan al-Hammadi, who had served as chairman of the board of directors of Union Properties, and three other board members were dismissed, leaving in place just three of the company’s seven board members.
The company, one of the biggest real estate developers in the emirate, is known for building Dubai Motor City.
The decision was announced in a disclosure on the Dubai Financial Market stock exchange website. It comes after a late Monday night disclosure on the same site of an Arabic letter from the public prosecutor for public funds ordering the detention of al-Hammadi pending investigation. The letter added that the case remains under investigation.
Trading on the company’s stock was suspended Monday “until resolutions are disclosed,” according to a brief statement on the stock exchange’s website.
Last month, Emirati prosecutors announced they had launched a major investigation into Union Properties over allegations the company had committed fraud and other offenses while trying to claw its way out of debt. The investigation involved allegations that the firm sold property at less than its real value and hid the name of the beneficiary of the sale, as well as allegations of forging documents and other violations.
A stock market filing by Union Properties identified a March 2020 transaction in which Amna al-Hammadi purchased a property for 30 million dirhams ($8.1 million) that had been earlier valued at 49.5 million dirhams ($13.4 million). Previous filings on the London Stock Exchange identified Amna as Khalifa al-Hammadi’s sister.
Union Properties’ filing sought to explain the sale by noting it came amid “the spread of the COVID-19 pandemic and its accompanying negative effects – and in light of the company’s commitment to settle its debt towards its lenders.”
Union Properties piled on some $2 billion of debt during Dubai’s financial crisis over a decade ago. The company had nearly $500 million in debt at the end of last year, according to their financial filings.