A senior executive of Khoie Properties, the developer behind a Dh2 billion (US$545 million) project on Ras al Khaimah's man-made island of Al Marjan, has been sentenced to three years' imprisonment for bouncing two cheques worth a total of Dh114m. According to his lawyer, Ibrahim al Mulla, the convicted executive, who is already in jail, filed an appeal yesterday. A medical report dated June 9 states that the jailed executive suffers from serious heart problems.
La Hoya Bay is a mixed-use development on Al Marjan, a reclaimed island designed in a series of curves. The project was sold to about 800 investors, half of them from Britain, in 2007. The investors became anxious when little progress was recorded at the site. The Ras al Khaimah Government took legal action when the developer was unable in December to honour a Dh57m cheque to the RAK Investment Authority (RAKIA) to pay for the land on Al Marjan.
"Sadly, RAKIA's officials have not been able to accept our deferred payment proposals and have taken legal action, and placed our company and project in a dangerous position," the company said earlier this year in a statement signed by its chief executive, Frank Khoie. On June 1, a second cheque for Dh57m also bounced and two other cheques are still to be cashed in, making the total of the unpaid amount due to RAKIA nearly Dh230m.
After negotiations failed to resolve the future of the project, RAKIA has asked the court to appoint an official receiver in order for a governmental company to build the first phase. Khater Massaad, the chief executive of RAKIA and adviser to the Crown Prince, said two weeks ago: "We won't make it complicated for investors. Those who have paid for a studio will get a studio. The project will be built. But maybe not all of the project. Our role is really to secure the first phase in order to protect the investors."
This option may take longer than expected to be implemented because Khoie Properties is not officially bankrupt, said a director of Rakeen, the master developer of Marjan Island. ngillet@thenational.ae
