A German real estate developer involved in several projects in Dubai has been hit by a financial crisis because of the sharp decline in property prices following the 2008 global fiscal distress, a UAE newspaper reported on Tuesday.
Alternative Capital Invest (ACI), based in Jumeirah, has filed for insolvency at a court in the German town of Bielefeld amidst growing concerns by local investors who have paid nearly 50 per cent of the projects, the Arabic language daily Alroya Aleqtisadiah said in an unsourced front page report.
Its founder, Uwe Lohmann has resigned as a CEO of the Company, blaming a sharp decline in its asset value for the company's financial trouble, it said.
"ACI could not face the sharp fall in its asset value, which forced it to announce the bankruptcy of some of its projects in Dubai," the paper said.
"The company has filed for insolvency in Bielefeld and told court the move was imperative because of the downturn in the real estate sector in Dubai...the Company said it had not yet completed its projects in the emirate."
The report said ACI's announcement had triggered concern and anger among local investors and quoted some of them as saying the Company had already received nearly 50 per cent of the payments.
"The German prosecutor has said that the Company has been under probe over the past few months following accusations of fraud by investors," it said.
"Investors in Dubai expressed their resentment at the situation as they wondered how a company could announce the bankruptcy of some of its projects and the continuation of others...they also wondered whether a company with projects in the local market could declare bankruptcy abroad..."
Founded as a family entity, ACI is an affiliate of Alternative Capital Invest, one of Germany's most prominent providers of investment solutions.
By Staff
© Emirates 24|7 2010
