11 January 2009
Dubai police are holding the chairman of Dynasty Zarooni, Kabir Mulchandani, amid ongoing accusations of fraud at the company from investors, according to reports.
The firm's lawyer told 7DAYS that the "allegations are groundless, and we are preparing our legal case".
Reports yesterday restated the allegations that the company had bounced cheques and made guarantees of returns to investors.
Last week, Mulchandani told 7DAYS that there was "no question" of any cheques from Dynasty Zarooni bouncing.
"If somebody can produce a bounced cheque of even one dirham, add five zeroes to that and we'll give that amount," he said.
"Not only have we not bounced any cheque, we have not deferred or delayed any single payment, we are the only company that is on time with every single payment, not even late by a day, to all properties we have purchased - despite market conditions."
It is alleged that clients were requested to invest dhs300,000 per month with Mulchandani, which he promised would return profits of a million dirhams a month after the first six installments.
Mulchandani claims that these payments were a membership fee that gave investors first right of refusal on new properties at pre-launch prices from Dynasty Zarooni.
However, an investor told 7DAYS yesterday that even a membership such as this would be illegal for the firm to run.
"He [Mulchandani] is not allowed to run a membership, the company is a DMCC-registered company and the approved activity for the company is business consultancy management," he said.
He added that around 40 investors had lodged complaints against the firm.
On Wednesday, Mulchandani said that the number of investors making complaints about the company was irrelevant without evidence.
"Unfortunately the situation that we have is that obviously they will all now form some sort of a union, because they all don't want to pay. So if there's say ten people who don't want to pay, that doesn't make them right, that makes them wrong ten times over.
"You'd probably believe ten people but the fact is that if you need to see the documents," he said.
He also said that Dynasty Zarooni had not tried to act outside its remit as a buyer and seller of properties.
"I've categorically said this every time, our sales team know it and our documents say it we do not run an investment company.
"We buy and we sell, when you sell you transfer risk and reward. So the upside is yours, good luck to you and the downside is yours if it does happen and that's unfortunate," he added.
Mulchandani maintains that the investors now making criminal complaints against him are doing so because post-dated cheques given to the company for both the membership fee, and for properties they purchased, have bounced.
"The problem in this market is that people were all here for the bull run and you need to have seasoned people to deal with problems and not run around in a frivolous manner and make allegations that are clearly false just because they are not able to meet obligations," he said.
Dubai police are holding the chairman of Dynasty Zarooni, Kabir Mulchandani, amid ongoing accusations of fraud at the company from investors, according to reports.
The firm's lawyer told 7DAYS that the "allegations are groundless, and we are preparing our legal case".
Reports yesterday restated the allegations that the company had bounced cheques and made guarantees of returns to investors.
Last week, Mulchandani told 7DAYS that there was "no question" of any cheques from Dynasty Zarooni bouncing.
"If somebody can produce a bounced cheque of even one dirham, add five zeroes to that and we'll give that amount," he said.
"Not only have we not bounced any cheque, we have not deferred or delayed any single payment, we are the only company that is on time with every single payment, not even late by a day, to all properties we have purchased - despite market conditions."
It is alleged that clients were requested to invest dhs300,000 per month with Mulchandani, which he promised would return profits of a million dirhams a month after the first six installments.
Mulchandani claims that these payments were a membership fee that gave investors first right of refusal on new properties at pre-launch prices from Dynasty Zarooni.
However, an investor told 7DAYS yesterday that even a membership such as this would be illegal for the firm to run.
"He [Mulchandani] is not allowed to run a membership, the company is a DMCC-registered company and the approved activity for the company is business consultancy management," he said.
He added that around 40 investors had lodged complaints against the firm.
On Wednesday, Mulchandani said that the number of investors making complaints about the company was irrelevant without evidence.
"Unfortunately the situation that we have is that obviously they will all now form some sort of a union, because they all don't want to pay. So if there's say ten people who don't want to pay, that doesn't make them right, that makes them wrong ten times over.
"You'd probably believe ten people but the fact is that if you need to see the documents," he said.
He also said that Dynasty Zarooni had not tried to act outside its remit as a buyer and seller of properties.
"I've categorically said this every time, our sales team know it and our documents say it we do not run an investment company.
"We buy and we sell, when you sell you transfer risk and reward. So the upside is yours, good luck to you and the downside is yours if it does happen and that's unfortunate," he added.
Mulchandani maintains that the investors now making criminal complaints against him are doing so because post-dated cheques given to the company for both the membership fee, and for properties they purchased, have bounced.
"The problem in this market is that people were all here for the bull run and you need to have seasoned people to deal with problems and not run around in a frivolous manner and make allegations that are clearly false just because they are not able to meet obligations," he said.
© 7Days 2009
