DUBAI // Lawyers for seven former property executives accused of taking bribes and illegal commissions claimed yesterday that there was nothing in UAE law that prohibited what their clients had done. Four former employees of Sama Dubai, the property arm of the government-owned Dubai Holding, and one former employee of Damac, one of the UAE's largest private property developers, appeared before the Criminal Court of First Instance to plead not guilty to taking illegal commissions from the sale and resale of land owned by the Government.
Judge Fahmi Mounir granted a defence application for an adjournment but all five men were denied bail. The hearing will resume on Sunday. At the start of a separate trial, two former employees of Nakheel, the Dubai development company behind such projects as the Palm trilogy, the World and Waterfront, were charged with accepting illegal commissions by charging an extra two per cent for themselves on the sale of land on the Palm Jebel Ali development.
They too pleaded not guilty and were denied bail; the trial was adjourned until March 29. The men appeared in court yesterday in the first two of what are expected to be a series of trials linked to wide-ranging corruption investigations. Arrests began more than 10 months ago and as many as 30 executives from several companies are believed to be in custody. Most have yet to be charged. Details emerged at the hearings of some of the alleged business practices at the heart of the investigation.
In one case, a cash bribe of more than Dh5 million (US$1.36m) was allegedly delivered to a defendant's home in a black suitcase. In the Sama case, the former CEO of The Lagoons project, AM, 42, is accused of having accepted five apartments, worth Dh2.69m, and Dh200,000 in cash from a company seeking to delay payments on seven properties it had purchased in The Lagoons. He is charged with failing to terminate the company's contract for defaulting on its payments and allowing the resale of the properties on its behalf.
His actions, prosecutors said, resulted in a loss of Dh137m that Sama could have made had it sold the land to another investor. The company also lost Dh4.63m in transfer fees. An expert from the Dubai Financial Control Department said in a statement that AM had registered four of the apartments in his name and one in his wife's. MA, NA and MB, a 41-year-old former sales manager, a 23-year-old sales consultant and a 28-year-old sales executive with Sama Dubai, who all also worked on The Lagoons project, are charged with making Dh4.85m in illegal commissions from three separate property deals.
It is alleged that in one they asked for a one per cent commission for reselling land owned by a private company, worth Dh1.35m, through Sama. They are also accused of asking for a commission of Dh1.11m for the resale of land belonging to a sheikh. In a third deal, they allegedly asked for Dh2.37m from Damac for the resale of three plots of land it owned in The Lagoons. Farhan Faridoni, the CEO of Sama, said in a statement that company policy did not allow employees to operate as property middlemen: "The role of employees is merely to facilitate financing procedures in case investors wished to transfer their property to another investor."
All four defendants are also charged with revealing company secrets in the form of price lists and the names of owners. This, added Mr Faridoni, was in breach of a "secrecy clause" in their employment contracts and in agreements between Sama and its client. A fifth defendant in the Sama case is charged with accepting a bribe of Dh650,000. AH, a 32-year-old Syrian and former manager at Damac, is also charged with conspiring with MA and MB to take illegal commissions from Damac over the resale of three plots.
Hamdi al Shiwi, MA's lawyer, told the court the men's actions "were permissible and legitimate as they are not criminalised by a specific legal text". His application for his client and co-defendant to be released for any bail terms the court saw fit was refused. "My client has been detained for all these months for actions which are not criminal acts, therefore precautionary detention is not justified," he said. "He is an Emirati and a resident of Dubai, therefore there is no risk of flight."
The men, he said, had deserved the commissions, which had been earned outside their official duties and in a personal capacity. Lawyers for the four other defendants agreed and asked the court for time to examine the 4,000-page prosecution case file. In the second trial, two former executives with Nakheel were charged with asking for a bribe in the form of an extra two per cent commission for themselves on the sale of land on Nakheel's Palm Jebel Ali project.
KM, 28, an Egyptian former sales executive, and WJ, 32, an Emirati former sales manager, are said to have taken a commission of Dh5.13m on a deal worth Dh265m. This was in excess of the commission charged by Nakheel that was included in the price. Mr al Shiwi, who also represents KM, applied in vain for his client's release on bail, claiming there was a lack of compelling evidence. "My client has been in custody for 10 months while investigations continued, no evidence was shown by prosecutors," he said. Sameer Jaafar, WJ's lawyer, also pleaded for his client's release on bail; he was an Emirati, a senior manager and his place of residence was known. He had already spent seven and half months in detention.
The prosecution's key witness, an American sales consultant at Nakheel, said in a statement that in June 2008 he learnt that WJ was prepared to sell several sea-facing plots of land on the Palm Jebel Ali that had been reserved for a five-star hotel. In return for the sale, WJ was asking for an extra two per cent cash commission for himself and KM. AD, 31, said he pretended to go along with the men's plans but later told officials at Dubai Holding what was going on.