Corruption
Corruption scandal rocks Dubai
Corruption is supposedly unheard of in the state of Dubai. Sheikh Mohamed bin Rashid Al Maktoum, vice president and prime minister of the United Arab Emirates, and the ruler of Dubai, has a strong handle on the way his emirate runs from all standpoints--economic, financial, government, practically everything that reflects image.
However, once in a while, a few unscrupulous and careless business “practitioners” slip through the cracks unmindful of the mines ahead. I can recall a few years back while residing in Dubai, a previous director general of the Dubai’s civil aviation, a general manager of one of the first-ever built, exclusive golf courses/resorts, several five-star hotel managers and mega-mall operators were indicted for corruption, fraud and misappropriating excessive funds.
Just like any booming capitalistic state, Dubai is not quite immune to the disease of corruption, as new developments prove. Last September 11, the United Arab Emirate’s financial giant Tamweel's deputy CEO, Abdulla Nasser Abdulla, has been detained as part of ongoing investigations into corruption in Dubai's booming real property market. Local papers have brought the spotlight firmly back onto the negative side of the emirate's economic success story. News of the deputy CEO's detention in connection with financial irregularities hit the group's shares hard on the Dubai Financial Market.
The scandal hit the press less than a month when two former Tamweel executives--Adel Al Shirawi, then Tamweel's chief executive, and Feras Kalthoum, the finance company's head of investments, were detained.
Tamweel Properties & Investments is a wholly-owned subsidiary and is Dubai's largest mortgage lender and a central part of the emirate's booming real estate market, said Edward Poultney, editor of Emap Limited. “Investigations form the latest act in the Dubai government's crack-down on instances of corruption, embezzlement and abuse of position as it attempts to improve transparency and strengthen investor confidence in the property sector,” he said.
Earlier in April, the Khaleej Times reported that Nakheel Poroperties, the Dubai-based real estate developer which has teamed up with US property magnate Donald Trump to sell condominiums on its $12.3 billion artificial Palm-shaped island, was at the center of a crackdown on alleged corruption in the emirate. Two people were arraigned on suspicion of bribery days before a high-profile sales team led by its CEO, Chris O’Donnell, headed to the US to lure investors to Dubai’s $300 billion property boom.
But, according to Stephen Atkinson, CEO of Arabian Real Estate Investment Trust, Dubai is relatively transparent. “When you talk about transparency in the property sector, Dubai still leads the market, which is an improvement,” Atkinson said at the recent Cityscape USA in Manhattan.
On ranking business transparency levels in Middle East countries, Dubai lawyer Mohamed Kamal, partner, Al Tamimi & Company, citing Jones Lang LaSalle’s survey, said that Dubai is nowhere near the top five positions. Globally, the top five positions belong to Canada, Australia, New Zealand, USA and the UK. Dubai is further down the scale at 32. He said: “A useful indicator in terms of where Dubai is, with respect to other jurisdictions, shows a rank in line with where Singapore is. Dubai is seen with similar real estate markets as Singapore and Hong Kong. Abu Dhabi is at 54. The other emirates are at rank 72.” Dubai has tried to bolster its regulatory framework from a foreign investors perspectives - used to safeguards, consumer protection legislation, build quality standards, and an environment conducive to lending and sustaining growth appreciation.
“Dubai is almost complete in legislation. One of the laws came about last year in which developers register projects and obtain approvals; it was followed by an escrow law set for purchasers for properties in Dubai who make payments towards construction,” said Kamal, adding that these laws have certainly slowed down launches of projects in Dubai, as well as made processes the developers undergo very stringent. There’s greater transparency on who is actually approved.
“From an investor’s point of view, you have comfort in knowing they have been through the process,” said the attorney. Over 700 developers registered in Dubai are currently asked to go through the approval process.
Another important piece of legislation designed to protect investors in Dubai from paper trading, which is when people put down deposits of 10-25 percent for a simple contract, has been passed. The paper would have been traded as they would have had in the futures market which begs the investors’ question: How secure is a contract in Dubai? Some developers did not deliver. Some engaged in double-selling when they would cross a buyer’s name off the list then resell the same property to some other buyers over and over again. Risks involved in paper trading scams are now covered by Dubai’s new escrow law.
Last month, another legislation has made it mandatory on all purchasers to register their contract with the lands department. Kamal said: “The biggest factor and safeguards are the implementation of the laws. We are at a stage with a complete set of legislation.” Investors, however, may need to check out the practical applications of the escrow law, the resolution of disputes and issues of developments. Dubai has not yet seen many cases of breaches. But there are a few. In terms of the real estate landscape in Dubai, a lot of companies are public companies; a majority is private who increasingly try to promote transparency in terms of business practices, added Kamal.
When asked if a defendant could win his case against the owner who may be the ruling family, Kamal said: “The initiatives of Sheikh Mohamed maintain fair treatment of legitimate claims, disputes and dispute resolutions. We have seen cases of arbitration where foreign investors try to protect contractual rights. There is a view that chances of success can be slim if you are trying to take on a Sheikh or a firm with majority of the shares owned by the Sheikh. But certainly the move of all companies is to be accountable and to allow due process of legitimate claim.”
Egyptian national Karim Masaad worked for Nakheel Properties, which is owned by the Sheikh. Nakheel said he “resigned” as a sales executive and questioned in connection with alleged wrongdoing while working for the developer. Masaad was the second person held by Dubai authorities in the Nakheel investigation. Walid al-Jaziri, Nakheel’s general manager for sales, was also questioned, according to the Khaleej Times. “Nakheel sits at the heart of the multibillion business empire of Dubai’s ruler Sheikh Mohamed bin Rashid al-Makhtoum and is a cornerstone of his plan to make the emirate an international business hub to rival New York and London.”
Walter Kleinschmit, founder of R2E Consultants Inc. revealed that Dubai commercial developer Damac Properties was guilty of delaying delivery of numerous housing inventory. Damac was “pulled over” by the court of public opinion to respond to this negligence. He said, “Emaar and other developers faced a major storm about 18 months ago and made to answer to this legal and social process.”
Recent arrests suggest that Sheikh Mohamed wants to clean up the emirate’s reputation in a bid to lure foreign investment. Dubai is aiming to double the size of its economy to $108 billion by 2015. To do this, it needs foreign money. And this cash would certainly come from the two billion people within a two-hour flight from Dubai. "The success of the current boom is making it unaffordable for people in the lower echelon to live there," said the R2E chair, adding, "But there are enough rich people who want a second home, or first home or want to acquire residential rights in Dubai. It is imperative to keep those people happy in a community that's welcoming and supportive."
Comments
The previous Chairman was heavily involved in those corrupt practises, and he protected Manal by marrying her.
I don't think she's in Dubai any more. With all the money they have swindled from the country I'm sure she has been set up somewhere in Western Europe.
Where is she now?
So in conclusion, Manal Shaheen and Alya Mahdy, (previously of Nakheels Sales Marketing and Customer Service Division), have allegedly stolen hundreds of dollars and are now free, living it up somewhere around the world.
Now Marcus Lee and Matt Joyce who also worked for Nakheel (Waterfront City Division) have been jailed for YEARS, yet there is still no evidence that they have done anything wrong.
I guess this is what happens if you trust the United Arab Emirates / Dubai. There's just no justice at all.
Why is the Australian Government doing nothing? I guess it hasn't been in the media enough for them to care.
I hear that finally Alya Mahdy was fired from Nakheel.
Its about time.
Khalifa,
I apologise for my rude comment at the end of my last post.
It's just frustrating to see people who I personally know stole money never being brought to justice, just because they know people in high places.
Hopefully Dubai will become more transparent. I don't think that westerners will feel safe there again until it is.
Peace out,
Peter.
Peter, Thank you for your response even though now you turn against me for no reason other than asking if manal Shaheen has ever been charged and if she was guilty she would not be walking free as she is today.
As for opening my arrogant emirati mouth my dear, how have I been arrogant? I have accused our ruling family of being above the law and i have also mentioned that it is kind of surprising that this website comments are dedicated as revenge to manal & Alya (whom i honestly dont know and dont care).
I hope my country will become more transparent and rule of law will be applied to all nationalities, religions, races and above all to the ruling family members who are the only ones above the law.
Everybody is innocent till proven guilty thats all am saying Peter.
With my best wishes,
Khalifa
Khalifa, you are correct, you do not know these women. Manal Shaheen is best friends with one of the Sheiks daughters so yes she does have immunity. And yes trust me I have a very very good understanding of the Dubai legal system. These are by no means the only friends of the sheiks family who have stolen money from the local government or international investors.
Maybe next time before you open your arrogant Emirati mouth you will do a bit of research (that's what educated people do!).
Is this a anti manal Shaheen & Alya Mahdi website? I am surprised about the language used against these individuals. Do you honestly think if there was a shred of evidence against them they would be walking around free? I dont know any of these individuals but I know the Dubai Justice system very well.
I agree the dubai justice system has some major flaws, but nobody gets away fromanything regardless of how high his/her position is (unless they are from the ruling family where the laws dont apply to them and we have to admit it).
So trying to vilify Manal Shaheen when she has never been charged or taken to a court looks like a dirty smear campaign for the really guilty ones or those who were colleagues and have a personal grudge.
Dubai ruler has admitted making many mistakes and lets hope he actually starts applying the rule of law to protect the foreign investors rather than just focusing on protecting local developers.
Khalifa Al Thani
Anyone know what is happening with Marcus Lee and Matt Joyce? Why are they still in Dubai if the government has no evidence against them?
It's a shame that they suffer while those that stole so much have still not been punished.
Gaurav, you're an idiot.
Innocent people are in jail while fat b_tches like Manal Shaheen are roaming around free. You won't even see a single article mentioned how she had hundreds of millions of dollars hidden in the walls of her house. So yes, people DO care that they stole money.
Moron!
Why are you people so fixated on Manal Shaheen and Alya Mahdy. Who cares if they stole money or took bribes from Nakheel? Do you think the UAE government would embarrass themselves by exposing the level of corruption by its own? Get a life.
Doc, many people have personal vendetta against Alya Mahdy because she was terrible person to work with at Nakheel. She made people cry, wanted people help her and Manal Shaheen steal money from the Nakheel, started wearing Abaya as firings at Nakheel based on religion, lied to people that she was from different countries that she only went to holiday on, helped push land prices so high that developers could not make profitable building, and did not have much real estate experience.
I am sure that if she was a nice person and was good at her job all these people would not be say bad things about her.
Mohammed, you are wrong. I heard that over a BILLION Dirhams was found at Manals' house. I wonder who gets the money?
Why are Marcus Lee and Matt Joyce still on trial for corruption when 300 million Dirhams was found in Manal Shaheen's bedroom a few months ago? Is it not bleeding obvious that Manal is the main culprit when it comes to taking bribes at Nakheel?
It seems as though the UAE government is only interested in blaming "others" for its problems and is not willing to accept that the majority of the corruption in Dubai is caused by the local Emiratis.
Doc I must question your comment "She was placed as the front person to negotiate deals with proper terms and conditions(company procedures) as others benefitted from this with under the table deals." This sounds like a typical comment that Alya would say.
Does this mean that Alya Mahdy organised Manal Shaheens bribes? Just because you're asked to do something on behalf of someone else does not mean that Alya has not done anything wrong! If Manal asked Alya to organise the sale of a plot of land to someone and take a 6% bribe and pass it onto Manal does this mean that Alya has not done anything wrong? No! This means that Alya participated in the corruption that occurred at Nakheel. Also, as if anyone would regularly collect bribes and not expect as least some sort of kickback.
Being a former staff member I should point out that the CEO (Chris O'Donnell) held a meeting with our entire department just to say that he thinks highly of Manal and that she hasn't done anything corrupt. Considering that we're talking about the Middle East, why else would he have held the meeting if he didn't think that everyone was under the assumption that Manal was in jail (because she never returned from her holiday on her expected arrival date)? Obviously Chris said this to protect himself from the wrath of Manal and the Sultan who she was apparently having an affair with.
One more point is that the Sultan (CEO of Dubai World) was using Nakheels construction materials for his own projects. So Chris had no choice in sucking up both of these corrupt individuals or he'd probably be accused of the same type of bogus corruption allegations as Matt Joyce and Marcus Lee.
Doc, what exactly were these "company procedures?" I used to work in the marketing department and know that there were never any "company procedures!" The only direction we had was from Manal who only seemed to be interested in making as much money as possible from taking bribes. This is why she blocked all land sales so that she was the only one able to collect on the 6% bribes she was receiving.
So Doc what you are basically saying is that because Alya was TOLD to undertake these "company procedures" (which we know there were none!) that she could undertake whatever illegal activities she wanted because she was just following orders? Does this mean that if a soldier was told by his commander to go and murder the families and children of a village that the soldier is not the slightest bit guilty of committing those crimes?
Alya is just as guilty as Manal and everyone that worked with these ladies is well aware that the only reason they are not in jail is because of their connections to the Sheiks daughter.
This entire topic of discussion brings back too many bad memories. Thank god that I'm safe and sound in the UK. I will never set another foot in Dubai as long as I live.
I forgot to mention that corruption was / is also nearly "unheard of" because the UAE government does not allow negative comments to be written about the Sheikh or the government or friends of the Sheikh.
Many developments in Dubai were owned by locals who in the end promoted buildings which were never built, and then they just took the money and ran. All of the investors were left without recourse to obtain any of their investments back.
If a foreigner bounces a check for 100 Dirhams, then they're locked up in jail until it's been paid. This would never happen to a local, in fact it seems as though the locals have a right to steal from whoever they like because it's their country so they can do whatever they want.
What a fair justice system! I don't know why this country is still glamorized in movies like Sex in the City 2 when it's just an archaic undemocratic country that still treats women like worthless dogs.
Corruption in Dubai is only not allowed if you're a foreigner.
If you're a local with good connections then you're free to steal as much money as want, especially if it's from foreigners.
Hahaha this is very funny. Just found this article searching for Dubai corruption. I meet Alya Mahdy in meeting a few year ago. She used the word "HOLISTICALLY" in nearly ever sentence she said.
"Yes we must look at this holistically... and we will do this holistically... because its holistic.." She try very hard to pretend she is from a western country but we know she is from Yemen.
Doc, everyone knows Alya Mahdy and Manal Shaheen were corrupt. I moved from Scotland and worked with Nakheel for 3 years so I am well aware of the situation. Although I never worked with either of these individuals people do talk. Dubai is a small place and there's not too much to do on the weekends besides from having dinners with friends. On several occasions individuals mentioned about what was happening in the Sales Department.
It was such a shame that a company that had so much potential was corrupted not only by individuals looking after themselves, but also by people (such as Alya and Manal) who pushed sales prices so high that every development became unfeasible. In the end you can only blame their poor level of education and greed for their wrongdoings. It's certainly a shame that they were never brought to justice.
Vince
what is it about you guys and Alya Mahdy. It seems you all have a personal vendetta against her. According to very close sources she is clean and has never taken any sort of bribe. She was being used with out her knowledge while others were benefiting from it. She was placed as the front person to negotiate deals with proper terms and conditions(company procedures) as others benefitted from this with under the table deals. I suggest you get your sources of information right before sending out such malice comments.
it's Persian Gulf!
Dubai is certainly not a safe place to work or live. The Locals can get away with almost any crime. Their motto is: this is my country, and I can do whatever I want. And the locals enjoy being mean to outsiders. This is a typical "Saudi" Arabs' attitude, you wont see elsewhere. Middle Easterners are nice to their guests. the exception is Saudi arabs. The nice ones in Dubai are from diff. roots. but those with most power enjoy torturing others; be it their slave servants, or the firm engineers! both give them a feeling of power. the second case even more! so be careful.
itz been confirmed by several media reports that manal shaheen no longer works at nakheel. obviously she was forced to resign as who else would give up a job paying 150,000 or so dirhams a month (about $45,000 USD) when they have no reputable education or previous work experience?
hopefully one day the media world will tell the true story about manal taking billions of dollars in bribes and most probably embezzeling quite a bit of money as well.
some of the other commenters mention that alya mahdy was probably involved so itd be good to see her brought to justice as well.
please comment if you find out that alya mahdy has been fired from nakheel. its about time.
yay. word on the street is that manal shaheen has been fired from nakheel. unfortuntely she has escaped jail by paying back the bribes she took. she really embarrassed herself.
hopefully her sidekick alya mahdy has also been fired. if anyone knows if shes been fired or sent to jail please write a message on this website.
It looks like their still trying to chase Manal Shaheen and Alya Mahdy of Nakheel in connection with the bribes they've taken.
http://business.maktoob.com/20090000417566/Dubai_corruption_crackdown_at...
Hi Saeed,
Unfortunately many of the locals related to Sheikh Mohammed are not being convicted of any wrong-doing to avoid further embarrassment. Even though they stole 500 million from investors there are others close to the Sheikh who has stolen even more.
Manal Shaheen (Chief Operations Officer) and Alya Mahdy (General Manager of Sales) at Nakheel blocked all the land sales at Nakheel then sold hundreds of land plots in return for huge bribes. They also (at least attempted) to embezzle money out of Nakheel by buying it at below market value prices then reselling it to the public at inflated prices. Alya Mahdy's husband was a real estate agent and would have easily been able to assist in the process.
It is rumoured that Manal Shaheen is "untouchable" as she's friends with one of the Sheikhs daughters. This is how she was promoted from a secretarial position in the DIFC to the Head of Sales, Marketing and Customer Services in days.
If Manal and Alya still have their jobs, you have to wonder why the CEO Chris O'Donnell hasn't fired them? Maybe he's been taking some bribes as well? Who knows? Hopefully the truth will come out soon.
Given that so many people from Dubai know about the crimes committed by the sheikhs friends and family, one must wonder why he continues to be such a pussy. Isn't he in the slightest bit annoyed that they embarrassed him???
Interesting to read that dubai is transparent.
The question is why the ruling family members such as Sheikh maktoum hasher maktoum al maktoum and sheikh hasher maktoum juma al maktoum the brother in law of dubai ruler have cheated foreign investors in the ebony ivory towers of al fajer properties defrauding investors with 500 million dirhams using fake construction photographs. Why the courts and the police are protecting them? Where is the equality that dubai ruler was talking about? So being a sheikh is a license to steal?
Ok so all this Dubai bribery business is getting way out of control. I used to work with both Matt Joyce and Marcus Lee. I also worked with Manal Shaheen and her just as corrupt sidekick Alya Mahdy.
Now from my point of view, on my very first day of work at Nakheel I was asked by Alya Mahdy to help embezzle $1 billion Dirham, which is about $270 million USD. I soon realized that Manal Shaheen had blocked ALL land sales so that she could take 6% bribes on every land sale that went through Nakheel. Everyone knew that she was doing this.
Now what really pisses me off is the fact that Nakheels CEO is still Australian CEO Chris ODonnell. He obviously knows that Manal and Alya were stealing from the company and clearly lacks the balls to fire these people. Even worse is the fact that he hasn't done anything to help out his Australian friends Matt Joyce and Marcus Lee who are sitting in a filthy Dubai jail pretty much waiting to die. How can these guys be in jail for a bribe or a few million dirhams when Manal Shaheen and Alya Mahdy are walking around Scot-free (with their jobs!!!) as though they've never done anything????
Hopefully people will learn their lesson and never trust Dubai companies or their people ever again. I'm amazed that this hasn't been in even one newspaper ever!
Also hopefully people will realize what a money hungry, self centred gutless wimp Chris O'Donnell is; and what fat little corrupt monobrow midgets Manal Shaheen and Alya Mahdy are.
WAYNE tx for the article.... u are 1000 % right ..... hope everybody would know that ..... and the whole world ....
I can't believe how many people have been fired from Nakheel and that Manal Shaheen still has her job. How can someone that's taken so many bribes and has embezzled billions of dollars still be working there??? I guess that's because her Ninja outfit is a better justification for keeping her job than the fact that shes a terrible employee.
Also why does her sidekick Alya Mahdy still have her job when she was allegedly single handedly helping Manal with all these bribes? You have to wonder when someones promoted from Customer Services to General Manager don't you?
Nakheel Should come clean with the hard working investors who made it what it currently is.
They should announce and without delay the Indeed they have canceled the Badrah II project, cause no way they will complete it in by end of 2011 and they can not extend the delivery any further.
So all they are doing is frustrating the investors and trying to push them to so called consolidation. This is just not acceptable behaviour from someone like Nakheel. They will lose so much turst than what they already have lost with the investors, it will simply stupid for Nakheel to continue with Badrah II and other off plans projects , no investor will be crazy enough to continue paying them any further instalments, why would they, when they can get for the same price a finished, larger property in place like JBR or Dubai Marina.??
Time for Nakheel and those who are running it to come clean and by honnest for a change.
Time for the Dubai Governmet to also get invoved.
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