Dubai Royals Implicated in 500 Million Pound Theft of Brit's Company
Detained in Dubai warns “UAE is serious risk for foreign investors. If your business is successful, it is at great risk of being stolen by Emiratis, facilitated by UAE Royals, corruption and a legal system that is owned by the Sheikh and his friends”.
Radha Stirling, founder of Detained in Dubai is warning investors, entrepreneurs and executives that they could lose everything at the whim of local partners, partners that are legally required. Stirling has debriefed the British Chairman of KM Holdings and says “While I am used to attending to matters surrounding the highest levels of corruption and manipulation, Haddad’s story is a shock to anyone. Not only, Haddad shows us, do we have royals involved, we have major international law firms like Baker & McKenzie facilitating what is a serious breach of conduct and then enter Ernst & Young, another top international accounting firm, providing forged documents according to Mr Haddad and his legal analyst. It seems that with the right connections, you can get anyway with anything. Often the evidence is not available but in this case, we have meticulous records and evidence. Some of the documents were issued by the Government of Dubai and were divulged on Twitter and the parties involved tried to have it censored. It is about time that the world sees what can really happen to foreign investors”.
In 2008, Dr Mohamed Haddad was the chairman and 50% shareholder of a £500 million company in Dubai, KM Holding, when he received a text message from his partner telling him that he would have to sell his interests in the company for a fraction of their value or be sent to prison (for no reason). He declined the offer and assumed the jail threat was a “joke”. When he went to work the next day, "bouncers" prevented him from entering, and when he got home, the electricity and water had been cut off at his residence. Realising that the threat of imprisonment was not to be taken lightly, he left Dubai to resolve the issues from safety. Radha Stirling comments “Cutting off electricity and utilities to homes and businesses is a tactic used to intimidate or induce cooperation. We have seen this method employed in a number of cases and one client reported that the government property development company Nakheel used dirty tricks to force their business to close down when they did not want to discharge their long term commercial lease”.
“I was told to accept 4 x less than my share or go to jail” - Mohamed Haddad
The attempt to force Haddad out of his shares proceeded in Dubai in his absence through a series of fraudulent court cases that make the Emirate appear like the epitome of a banana republic. Haddad's business partner, Khulood Rostoamani, who had texted Haddad with the threat of jail and locked Haddad out of his own company’s premises, instructed Habib al Mulla, the company's legal advisor, one of the UAE's most prominent attorneys, and a close friend of the ruler, to attack Haddad through the courts.
Al Mullla was the right man for the job, the Chairman of the Dubai International Arbitration Centre (DIAC) by direct appointment of the Ruler of Dubai. With a long history of conspicuous legal improprieties, including submitting forged documents as evidence and even representing both opposing parties in the same case, Al Mulla has been protected by the government against prosecution or disbarment, and information about his frequent violations of due process has been actively suppressed; leaving him free to continue his highly creative practice of law with impunity.
“Habib Al Mulla has been protected by the government against prosecution or disbarment” - Radha Stirling
Al Mulla & his client went to almost comic lengths with this task; accusing Haddad of using company funds to pay for his dry cleaning, and of stealing his own car. All stunts to try to have Haddad imprisoned or prevented from returning to the UAE, thus preventing his ability to seek civil justice.
Eventually, Al Mulla went so far as to illegally represent Haddad in court as the supposed Plaintiff, to which Rostamani was the defendant. Mr Haddad tells us that this entire civil case was fabricated and used as a means to falsely provide testimony that was both fabricated and implicating. The purpose was to achieve a civil court judgment that shows that Mr Haddad had confessed to to embezzlement. The judgment would later be used as "evidence" to submit a complaint to the public prosecutor requesting that Haddad be arrested.
Mr Al Mulla had no instructions from Mr Haddad, no Power of Attorney (a document that is essential to most even basic enquiries on behalf of clients). No evidence was presented and Haddad was completely unaware of the proceedings; Al Mulla simply appeared, claiming to represent Mr Haddad and "confessed" to embezzlement. The Court allowed Mr Al Mulla to appear, representing both sides.
“He turned up to Court pretending to represent me so he could fabricate what amounted to a confession to embezzlement. I never imagined that the courts would allow this but I have heard that Al Mulla has used this tactic many times before” - Mohamed Haddad
Radha Stirling commented “It is absurd that a lawyer filed charges on behalf of his client and then got away with acting for the defendant, confessing to the charges he had created. Of course, one can’t lose if they are both teams and the Judge, although with reservations, issued a Judgment against Haddad which Al Mulla requested be escalated to Interpol. Interpol is used as a common tool by locals to prevent parties from returning to the UAE to seek justice. If they want you out of their business, the judicial conditions allow them to snap their fingers and force you to leave. You are a guest in their country and completely vulnerable."
It is difficult to fathom that this blatantly obvious breach of practice was allowed. Habib Al Mulla, a lawyer with so much experience, Chairman of Baker and McKenzie, Chairman of the Arbitration Centre, someone who is instructed to draft laws at federal level, has disrespected the laws of the UAE to such an extent, I wonder whether he should be immediately denied his practice licence and removed from all public appointments that he holds? One would think yes, but it is clear that Al Mulla is only able to practice this way, because it is permitted and perhaps even encouraged, by the ruler of Dubai himself, HH Mohammed Bin Rashid Al Maktoum, who remains close friends with Habib Al Mulla. Al Mulla should not be used as a scapegoat because it is clear that it is the entire establishment that needs to change. Dubai is trying to be an international respected player while acting like they are from the jungle. No one should feel safe to invest in the UAE while this is permitted”.
In order to avoid any potential recourse for Haddad to recover his interests in KM Holdings, the entire company, its facilities, its land, and all its assets, were "gifted" to a company owned by Sheikh Mohammed bin Khalifa bin Saeed Al Maktoum, the first cousin of the Ruler of Dubai; effectively making it untouchable.
The executive branch of the government exerts de facto control over the judiciary, so Haddad has no recourse through the courts to recover his stolen assets, since they were transferred to Sheikh Mohamed al-Maktoum. £250 million of that £500 million company still belongs to Mohamed Haddad; this is a massive theft to which the royal family of Dubai has been made accomplice.
"This case represents a breach of our Treaty with the UAE" - UK Embassy
Mr Mohamed Haddad, in a discussion with Radha Stirling, said “At the time, I had faith in Dubai and I really believed in the legal process. My profitable company was stolen and I have been in legal proceedings since 2008 proceedings I can’t even attend, because they will manufacture charges to keep me in prison, rather than in court. A lawyer I am accusing of taking part in stealing my company, apparently impersonating me confessed to theft on my behalf and wanted me on Interpol. Why? Because I didn’t want to sell my shares for less than what they were worth. I now know just how corrupt so many of these officials are and no one is willing to investigate my official complaints which are disappeared or set aside. Had I known then what I know now, I NEVER would have invested. I would tell any other business owners or investors, don’t do it. The more successful you become, the more likely you are to be jailed or ousted from your company. They are greedy and it doesn't matter how good friends you think they are. They will ditch a friendship for money in a second. They are ambitious and don’t care if they ruin people’s lives.”
Radha Stirling continues "Mr Haddad and I are pleased the FCO are supporting his matter. They have stated that this case represents a breach of the UK's Treaty with the UAE and will be making submissions to the UAE government. We are further exploring an application to the United Nations and lawsuits in alternative jurisdictions”.
"This case highlights the severe risks any businessperson or investor takes when embarking on any major projects in the UAE. Locals can steal your business, your villa, whatever they want, without recourse" - Radha Stirling