Indian businessman says he’s ready to complete project, but banks aren’t responding to him
Dubai: Abu Ali Shroff, the founder of Sheffield Holdings Limited, claims he’s still the developer of the Marina 101 tower in Dubai Marina and that banks have not taken over the project, as had previously been reported.
Investors have waited over 10 years for their units despite the building being 97 per cent complete.
Gulf News reported in October that three lender banks had taken over the project and were looking for a new investor to complete the handover.
The CEO of lead lender Bank of Baroda, Ananda Kumar, had told Gulf News at the time that they and Indian Overseas Bank plus Bank of India had been left with dues of Dh349.6 million, which have now risen to Dh427.33 million, according to a debt note on Bank of Baroda’s website.
Kumar said in October, “We are embarking with developers working to find a resolution to complete this project to ensure all investors and banks get back what they paid.”
However, Shroff, speaking to Gulf News from India, claims he is still the developer, but that the banks won’t speak to him, despite him claiming to have handed over Dh252 million in January 2020 after getting a 10 per cent discount on the loan.
“It is not a simple story of default by the borrower as it has more than 101 complexities to it and nothing is what it looks like on the face value of what is said by the lenders,” Shroff told Gulf News.
“First of all the bank had never taken over the project as what was said in previous news and on the contrary we were and yet are the developers of the project as we were trying to get the funds to complete the project with the assistance of an investment fund from overseas.
“We have just managed to raise the funds for the completion of the project but were shocked to hear some shocking news when we approached the bank for the way to find out the solution of how to proceed forward.
“It has been brought to our notice through the bank sources that they have sold the loan to some investment company from DIFC and that now the loan is not in their books.
“We sent them a legal notice to inform us who the new lender is so that we could discuss with them on how to proceed forward but until now they have not responded to us.
“We fail to understand why the bank is not willing to disclose the facts and details of the new lender of the sale of the loan if they have actually sold the loan and transferred their liabilities to another entity, and if they have not transferred their liabilities then the new investment company is ready to discuss with the bank the modalities of how to fulfill the loan obligation.”
Several investors were concerned about the project changing hands, as reported in Gulf News’ previous article in October, especially as some had no Oqood – proof of payment registered with Dubai Land Department – and some had even paid outside of escrow – through a third party and not direct to the developer. These investors now fear they will lose their money and their unit.
But Shroff said, “As long as we are the developers we will safeguard the investors’ interest, but the latest shocking news of the bank selling its loan and not giving us the information of the new lender makes it very confusing for us to know how to complete the project.
“As per my knowledge, any contract between two parties whether registered or not is valid, so anyone not registered has all the rights on their units but they would have to go through all the legal process to get their rights and that is only if we are changed as developers, if we remain then all commitments will be honoured by us.
“I am worried that anyone coming new will keep it in his mind not to honour any of Sheffield’s commitments and try to make huge profits for themselves rather than seeing the project to its completion and honouring the commitment made.”
Gulf News contacted Ananda Kumar, the CEO of lead lender Bank of Baroda, who said, “It is not prudent for me to comment now as the case is a matter of sub-judice.”
Dubai Land Department told Gulf News, “This is a matter to be resolved between the bank and the developer. Though the bank eventually did win and subsequently launched the execution phase, no action has been taken.”
Asked why investors were being asked to update their information with the DLD, the land department replied, “The financial information we have on record is outdated as it is from 2015.
“We have requested an update to establish what is yet to be settled by investors and identify the financial position of the project to help us build an adequate estimate for it.”
On whether investors could see an end to the uncertainty soon, the land department replied, “Yes, however, for RERA (Real Estate Regulatory Authority) to be able to complete the project handover, we will require the updates that we requested as they will ensure that buyers receive their units in a timely manner.”
What Shroff’s lawyer says
‘Mr Abu Ali took a loan for US$40 million to complete Marina 101 but the banks only gave US$35 million that’s why the project stalled in 2014/15. It is not the case that the building has been handed over to the bank, Mr Abu Ali remains the developer because the court has not given its judgement. All that has happened so far is that some units have been blocked. Mr Abu Ali has paid the money and is trying to make a settlement.” - Wael Abbas of Hassan Al Abdouli Advocates and Legal Consultancy.
What the investors say
“I personally would prefer if Sheffield is out as they didn’t communicate at all for one year with investors and I don’t trust them, but of course if they can honour the contracts without Oqood this would save a lot of investors who are going to lose money otherwise. I also want to get out of the hotel pool contract I have with Sheffield, my unit was supposed to be a hotel apartment and I lost confidence in Sheffield to run the hotel operations of my unit. Concerning out of escrow payments, the DLD said they will honour them as long as we have all the payment proofs (receipt, bank slip, etc), this fact made me very confident to invest again in the property market in Dubai,” said an investor who wants to remain anonymous, who paid Dh1.06 million in full for a unit back in 2016.
Hashim Al Hasani, purchased three one bed apartments in 2013 and paid 90 per cent of Dh1.4 million up front for each, but then found that the three had been converted into studios and that sea views had been obscurred by an external elavator. “My issue remains the same. I do not care about the fact of the building completion, I care about the fact that my units have a different floor plan than the one purchased,” he said. “I want a refund for breach of contract.”
Shroff responded: “We will find a way to compensate them in coming times when I have the projects, but if not with me there is nothing that can be done.”
Another investor, Niaz Khan, spent Dh1.4 million up front on a unit in 2015, and said, "I would like Sheffield to complete the project because they have a huge stake in it. Abu Ali is right, a new developer will buy cheap, look for a big profit and squeeze the investor. Personally I think Sheffield should be allowed to repay the debt and complete it, I'm sure they can find the deficit. That should complete it more smoothly than any alternative."
Source: Gulf News