Frank Khoie, the property developer behind the US$800 million (Dh2.93 billion) La Hoya Bay project in Ras al Khaimah, was released from prison on Monday after being sentenced last June to a three-year term. Mr Khoie was sent to prison last year because a Dh57m cheque written to the Ras al Khaimah Investment Authority (RAKIA) bounced. About 800 foreign property buyers, half of whom are UK citizens, are concerned about the future of their investment.
Mr Khoie yesterday confirmed his release. "I am very well and obviously feeling much better," he said, while declining to comment about the terms of his release. "I will issue a press release within a few days." RAKIA, which sold plots of land to Mr Khoie and sued him over dishonoured cheques, also confirmed his release but gave little detail about the terms of a deal between them. "The relationship between RAKIA and its developer was and will always be confidential," said Karam al Sadeq, the head of RAKIA's legal department. "However, I can confirm Mr Khoie has been released following rearranged contractual land payments."
Mr Khoie, the chief executive of Khoie Properties, owns one plot of land for which he paid about Dh72m. It comprises three finished residential buildings out of seven that were planned for the site and sold in advance. The project is located on the man-made Al Marjan Island. Designed in a series of curves, the reclaimed island is Ras al Khaimah's flagship master development and comprises more than 1,400 apartments in the seven buildings. Other phases of the project included offices, in Business Village, and shops.
Investors remain in the dark about the future of the project. "Are we in a better position now?" asked Ashley Merry, a UK-based spokeswoman for La Hoya Bay investors. "The main thing is the funding issue. Also, I have paid about Dh600,000 for a unit in Block F." Block F is not on one of the plots fully owned by Mr Khoie. "So I have a contract for a unit on a piece of land that may now be owned by RAKIA," Ms Merry added. "What are we going to do?"
Mr Khoie said last year his financial difficulties arose after the bank refused a Dh950m construction loan because there was no electricity supply from the public grid to the site. "They were supposed to give us electricity and water, which they have failed to do after four years. They are in breach of contract," he told The National last year from prison. "Our company is not bankrupt. We have Dh500m in assets. Ownership is mine. It is my project. I created it."
Khoie Properties has already received nearly Dh300m in down payments from investors and initially procured six plots of land from RAKIA at a total cost of about Dh300m. Foundation work on the project started and was then halted. "And what happens now if Khoie Properties does not perform?" Ms Merry said. "The stress is not over yet." firstname.lastname@example.org