DUBAI – In a major blow to one of the biggest real-estate conglomerates,authorities in the United Arab Emirates have seized the assets and escrowfunds (guarantee account) of Schon properties after it failed to depositinvestors’ money in the account.
The decision came on Thursday, apparently in a bid to protect the rights ofinvestors in light of Schon Properties’ actions of exploiting investors.
The Dubai Land Department (DLD) said it had taken the decision until theDubai Public Prosecution and Dubai Courts complete legal procedures torecover investors’ rights.
‘The step is aimed at protecting the rights of investors in light of SchonProperties’ actions of exploiting investors by refraining from depositingtheir money in Escrow (guarantee) account,’ said the department in acommunique.
The authority called on all investors to deposit their money in Escrowaccounts and transfer payments to developers as per the percentage ofcompletion in the projects, stressing that this was the only way investorscould preserve their money and ensure their rights are protected.
The Department explained that the move was part of its efforts toeffectively contribute to sustaining a well-regulated and transparentinvestment environment that provides necessary protection for all partiesand safeguard their rights.
Schon Properties was targeting mid-market buyers in affordable housingsegment and the company claimed last year that it had 8 million square feetdevelopment, valued at Dh7 billion. Also claiming to have more than 3,000customers, it vowed to have delivered more than 1.6 million square feet ofdevelopment by October 2016.
The Dubai-based developer had also announced that it had sold out the firstphase of major hospitality project iSuites at Dubai Investment Park, makingpublic that it was entering into markets of Jordan.
Schon Properties could not immediately be reached for comments despiterepeated calls.
*Schon Properties – Pakistan Link*
Schon Properties is a renowned name in Pakistan as well because it ownsland in the country, though its major stakes are in Dubai.
Moreover, it also owns the Multan Sultans franchise that took part in thethird season of Pakistan Super League (PSL) but did not manage to win thestar-studded contest.
The team was allowed to take part in the T20 contest after the Schon Groupmet the reserve price of $5.2 million per year for an eight-year contract,that had 10 bidders. The total contract was therefore worth $41.6 million.