Investors demand money back from developer ACI |
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German and Austrian investors are demanding their money back from funds set up for the construction of the Niki Lauda, Michael Schumacher and Boris Becker towers in Dubai.
The investors paid about €150 million (Dh779.7m) into funds to pay for the buildings. The investments would then be repaid from the capital gains.
But the investors said money due in March had not been repaid and they were consulting lawyers to withdraw their money from the funds.
Alternative Capital Invest (ACI)Alternative Capital Invest (ACI)
, the investment company behind the project, insists it has "solid assets" and the towers will go ahead, according to its managing director, Robin Lohmann.Mr Lohmann said the money to repay investors was not available because the projects could not be sold as planned due to the market slowdown.
He offered the investors the choice of waiting until ACIACI
's assets could be liquidated, or the chance to take property assets owned by another company, Falcon International Investment Group, based in Dubai.But some investors fear that if they accept the Falcon option, they may end up with additional risk and costs.
"Since I do not know the value of Falcon's properties nor what exactly the liabilities and commitments are according to Dubai law, I am extremely sceptical," said Hartmut Goddecke, the lawyer for several German investors. "We don't know what exactly we are buying here."
According to Martin Kraeter, a German business facilitator based in Dubai, the ownership of Falcon's assets is unclear, although it has links to ACIACI
."Falcon only speaks about reservation contracts of different properties but reservation contract is not a purchasing contract," Mr Kraeter said. "We may end up with shifting Falcon's risk into investors' responsibility."
But Mr Lohmann said: "With this package, we just wanted to show people that we have the ACIACI
assets which are the Boris Becker Tower, the Schumacher Tower and all the rest, and th0at in addition to that we also offer a security package through Falcon of fully paid assets worth about €100m, which is almost the double of what was due in March."In Dubai, property buyers who have invested off-plan in apartments in ACIACI
's buildings are also upset at delays in construction. Mr Lohmann said there had been complaints from the buyers but also delays in their payments to the developer.By Nathalie Gillet
© The National 2009
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