x Abu Dhabi, UAEFriday 21 July 2017

Investors appeal in Dynasty Zarooni property fraud case

Plaintiffs who claim they have been defrauded of more than Dh1.2 billion ask that the dismissed charges against the company be reinstated.

DUBAI // Plaintiffs who claim they have been defrauded of more than Dh1.2 billion by a property developer have asked that the dismissed charges against the company be reinstated. The 36 investors want the Dubai Court of Appeals to reopen the case against Dynasty Zarooni that public prosecutors had declared groundless. They claim that flawed investigations were conducted by prosecutors.

Two cases were filed by the plaintiffs last year against the company, its Indian chief executive K M, his Emirati business partner and managing director H Z and the British executive R G. The first case, which was referred to court, charged the men with setting up a bogus investment portfolio and defrauding investors of Dh893 million. The Dubai Court of Misdemeanours acquitted them on all charges on May 30.

The court reached its verdict after the defence presented documents that proved contractual agreements between the investors and Dynasty Zarooni. The documents showed that the investors had received more than Dh232 million in profits from their investments. The second case alleged that K M and his co-defendants committed a property fraud by selling investors plots of land that did not exist. Prosecutors dismissed the case after reviewing a report by a property market expert they assigned to investigate the allegations.

Lawyers of the law firm representing the plaintiffs, Al Sha'ali & Co, told the appeals court yesterday that the second case had been dismissed illegally. They claimed that prosecutors had combined unrelated police complaints filed against Dynasty Zarooni into one case and had failed to investigate the property fraud properly. The lawyers held that the escrow accounts registered to the company were not investigated and did not exist. They claimed contractors presented by Dynasty Zarooni as the builders of their Ebony and Ivory towers testified under oath that they had not taken part in any construction projects with the company.

"Three contracting companies have testified to prosecutors that they only signed agreements with Dynasty Zarooni but have not conducted any business with them," said lawyer Mohammed Safwat. A separate case has been filed against the property expert who conducted the initial investigation, according to defence documents presented in court. The documents allege that the expert had not conducted his evaluation properly and was legally bound to be prosecuted.

The court was also asked to present a different court-appointed expert to review the case. The court will hear from the defence on July 22. amustafa@thenational.ae