British investors take Casa Dubai to court

The dispute is another sign of fallout from Dubai's property market decline, which has incurred big losses on speculators.

A group of British property investors is seeking legal action against Casa Dubai, a UK broker that went into liquidation in January, to recover more than Dh2 million (US$545,000) invested in the UAE's property market. About 50 investors who bought across a range of off-plan projects in the Emirates allege Casa Dubai took payments from them between September and December, but never passed them on to the developers. Casa Dubai has said it was forced into liquidation because of non-payment by developers. "It's currently going through the liquidator, which is trying to prove whether anything untoward went on," said one buyer, who bought a property through Casa Dubai in Ivory Tower, a project by Sokook Investment Group. Ijaz Malik, another investor, said he lost Dh241,000 through Casa Dubai in a buy-back investment scheme by Al Barakah, an Ajman developer under investigation for alleged fraud. Franco Bucci, the managing director of Casa Dubai, was unavailable for comment yesterday. Shortly after the company closed in January, Mr Bucci blamed the global economic crisis, the decline in Dubai property prices and the failure of developers to pay commission on time. He denied any wrongdoing. "The official receiver will look into my conduct over the last two years and report on it," Mr Bucci said at the time. "If I have acted improperly I will face the consequences. I have not misappropriated funds and I have not personally benefited from this situation." Mr Bucci added that the company had "considerable value" before the slowdown, claiming it generated Dh126m between January and August last year, before sales dried up. While the commission made during this time should have been enough to sustain the firm, he said the company "was not in normal circumstances". "Developers do not pay commissions immediately [after] the sale is made," Mr Bucci said. "Most pay over 12 months and some even more. As the crisis deepened, more and more developers failed to pay commissions earned." He added that the company was further hit by Al Barakah, which claimed insolvency in December. Shariq Imran Khan, the Al Barakah chief executive, is being sought by Dubai Police for allegedly failing to honour cheques of more than Dh40m. The cheques were written last year in the name of investors to back up Mr Khan's promises of a 50 per cent return on property downpayments within six months. "When the news of this was made public, I realised that the arrangements made by Casa Dubai with investors on the back of the Al Barakah scheme might not be honoured," said Mr Bucci. In response to claims that instalments were not paid to developers, he said: "Some developers have refused to acknowledge that they have received funds from Casa Dubai as a result of the announcement of the closure. "I have tried to ensure all monies received have been allocated to every client account by developers, but cannot guarantee that this has been the case for all clients." Casa Dubai sold property on a number of other projects including buildings within Dubai Sports City, Metropolis Lofts, a project by UK Capital Investments, and Ivory Tower. [e-mail] [e-mail]