One of the largest property developments in Ras al Khaimah in the United Arab Emirates has been taken over from insolvent owner Khoie Properties, by the government, in a court action, which brings relief to the 800 investors of whom around half are from the UK.
Rakeen, the development arm of the Ras al Khaimah Investment Authority (RAKIA), said yesterday it would ensure that the rights of investors in the US $800 million (approx. AED 2.93 billion) La Hoya Bay project were protected. The project comprises seven residential towers and more than 1,400 residential apartments.
"The RAK Court's decision to appoint Rakeen as custodian of Khoie Properties is a significant step that promotes and protects the welfare of investors and property buyers," said Dr Khater Massaad, the chief executive of RAKIA.
"A judicial custodian is essentially a court-appointed trustee," said Philip Corfield-Smith, an associate of the law firm Pinsent Masons. "A government-owned developer has been appointed to step into the shoes of an insolvent private developer and continue the construction obligations. As far as I am aware, this is the first court decision dealing with this issue in the emirate."
The move to place the company under the control of Rakeen follows the jailing in June of Khoie Properties' former chief executive, who was sentenced to three years for writing two bounced cheques of AED 57 mln. each to RAKIA. RAKIA appealed to the court requesting that Khoie Properties be brought under judicial custodianship until the completion of La Hoya Bay by a competent developer.
Source: Brown Lloyd James Financial