Dubai Corruption
Dubai gets bailout from Abu Dhabi
Dubai got a US$10 billion lifeline from oil-rich Abu Dhabi to save one of its prized companies from imminent default Monday, calming fears for now about the city-state's shaky finances, said the Associated Press. Dubai's main stock market spiked more than 10 percent on the news reported by local and international press.
Local news said that the Dubai World, a sprawling conglomerate with assets ranging from the ocean liner Queen Elizabeth 2 to luxury retailer Barney's New York, had been up against a Monday deadline to repay a pile of loans from its Nakheel property division. Some $4.1 billion of the emergency funds will be used to pay off those bills. The rest will go to shore up Dubai World itself.
Dubai after all, was neither recession-proof nor immune to the global downturn. Just one out of the seven state members of the United Arab Emirates (UAE), Dubai has shown cracks. Dubai has clearly caught up with the world recession despite previous denials and claims that it was business as usual. The leaders of Dubai are reluctant to bear Dubai World's $60 billion debts that had raised serious concerns about the emirate's creditworthiness. Abu Dhabi’s action to bailout sister city Dubai appears aimed at allaying fears that more is to happen, before they undercut confidence in the United Arab Emirates as a whole. The two emirates share control of the UAE, a federation of seven semiautonomous city-states.
Abu Dhabi has oil; Dubai has become non-oil dependent for several decades and has made tourism and hospitality their economic engines. Dubai has flourished doing so until the series of world economic events.
Until the middle of last year, Dubai had shown little willingness to accept the fact that it too has been hit by the crisis. Economic and hotel real estate experts based there led people to believe Dubai was very much in control though there were signs of the slowdown. Even contrary to forecasts made by top real estate advisory groups such as Jones Lang LaSalle who insisted that the markets of the Middle East will outperform all other regions of the world in the next 1 to 2 years. The company even polled 350 top developers who believed late 2008/ early 2009 that the UAE stood to offer the best performing real estate market if not in the Middle East, then in the world.
Jones Lang LaSalle even released a first official Investor Sentiment Survey at the CityScape Dubai. The study was sent out in the aftermath of the crash of US Investment Bank and Lehman Brothers. It highlighted the fact that almost 50 percent of those surveyed believe the UAE will offer the best performing real estate market over this year and the next, saying investors are confident about the future performance of the Dubai and Abu Dhabi markets.
Into the first quarter of 2009, Dubai had started its slide, as with the rest of the universe. In reality, the so-called City of Gold was losing its manpower behind which the economy was built. Hordes of expatriate workers lost their jobs and were forcibly sent home. Visas were no longer renewed. Dubai cancelled over 86 percent more residence visas early 2009. Data from Dubai’s Ministry of Interior Naturalization & Residency (DNRD) showed that 54,684 residency visas were cancelled during the month of January, compared with 29,418 in January 2008. They were losing people at a rate of 1,764 visas per day.
A Dubai-based analyst said the aid package was to be expected but urged caution. Sheikh Mohamed bin Rashid Al Maktoum, vice president and prime minister of the United Arab Emirates, also the ruler of Dubai, tried to save Dubai with the merger of three large real-estate groups of Dubai Holding, which he owns. The Sheikh has a strong handle on the way his emirate runs from all standpoints--economic, financial, government, practically everything that reflects image and finances. However, in the end, Abu Dhabi’s bailout was inevitable.
Additionally, "This announcement constitutes a specific bailout of Nakheel, suggesting that as an entity (it) was deemed to be 'too big to fail,'" he said. "It does not, however, constitute a bailout of Dubai Inc. or Dubai World as a whole and this is important to highlight," said Fahd Iqbal.
Nakheel, a property developer and hotel operator best known for building manmade islands in the shape of palm trees and a map of the world off Dubai's coast, is central to this package.
Nakheel is the developer of more than $30 billion in real estate in Dubai, and The Trump Organization had signed on the deal with Nakheel in October 2005 creating Trump’s International Hotel and Tower. Both companies have invested substantially in the pioneering $US600 million development spread across a portfolio of eight hotels and resorts including the 800-unit condo-hotel of the US mogul. Trump’s tower was the initial development in Nakheel and The Trump Organization's exclusive joint-venture in the Middle East. However, Trump Organization's agreement with Nakheel including exclusive rights for 19 countries in the Middle East region and 17 major brands went south.
Authorities also softened their stance Monday, vowing that the city-state was committed to "transparency, good governance and market principles." Officials outlined a legal framework that promised to increase openness and protect creditors in future dealings with the conglomerate, offering lenders further reassurance in a country where formal bankruptcy proceedings are largely untested, said the news – a thing that Dubai has been working on since showing signs of the real estate market collapse middle of this year.
Comments
I used to work for Nakheel and I know FOR A FACT that Manal most
probably did NOT resign. She was was probably fired because she took
billions of dollars in bribes and probably embezzled even more.
It's believed that Manal embezzled money out of Nakheel by selling
plots of land to her brother at prices far below market value.
The investigation of her corrupt activities started mid-2008 but it
took this long to collate all the evidence against her. All of her
employees provided evidence against her to police during secret
meetings which started around July of 2008.
Manal was also friends with one of the Sheikhs daughters so the police
had to ensure that the had enough evidence against her before
corruption charges were laid against her.
Word on the street is that Manal was arrested last year but was
released after a sultan agreed to marry her. She was then forgiven for
her crimes after she paid back all the bribes she'd taken.
Her sidekick, Alya Mahdy, the General Manager of Sales, was also
investigated.
It was a shame that someone who'd stolen so much money from a company
kept their job while thousands of hard working employees were fired
over the last year or so, but now justice has been served!
It apears that Manal Shaheen has left Nakheel. She must have been fired as who would give up a 150,000 dirham a month salary? she had no good education and no good experience.
Manal has brought great shame on Dubai and her criminal bribe taking and embezlmnt will not be forgoten by us.
It's no wonder Nakheel is borderline bankrupt. Besides from making consistantly poor investment decisions the level of corruption was far too high to sustain such a profit poor company.
Just take a look at Nakheels second in charge Manal Shaheen. Manal Shaheen has established quite a reputation for herself. A quick google of her name will bring up pictures of her with numerous celebrities, yet many are unaware of her real career.
During the Dubai boom, land was hard to come by. Speculators soon realized that they could make hundreds of millions of dollars within a month purely speculating on land prices. Manal soon realized that in order to capitalize on her position at Nakheel she must take her own piece of the pie.
Her solution? Manal blocked all land sales at Nakheel so that they must all go through her. With Nakheel owning most of Dubai's vacant land the opportunity to score big was high. Manal then sold off land to speculators on the condition that they gave her approximately 6% of the land price, otherwise known as a bribe. Most of this land, particularily around the Dubai Waterfront development, was not allowed to be transfered to a third party. In order for Manal to make more money out of Nakheel she then arranged for further bribe money to be paid to her in order for plots of land to be transferred.
Manal Shaheen of Nakheel is believed to have been arrested in early 2008 for her part in corruption throughout Dubai. Alya Mahdy is believed to have done much of Manals legwork and is also known to have been investigated.
To Manals benefit, she is good friends with the Sheikhs daughter, and obviously to avoid public embarassment to the Sheikh none of this story has ever been published within the Arab world. Although Manal was arrested she aparently escaped jail by marrying a Sultan (wife number unknown), which is I guess one of the perks of being friends with the Sheikhs daughter.
One must also wonder why CEO Chris O'Donnell has not fired Manal? It all appears to be very suspicious.
In any event, for most Dubai expats and locals, the name Manal Shaheen is synonymous with corruption. I wonder if justice will prevail?
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