A year ago Mohammed Noorul Haq was the developer behind a dozen planned towers across some of Dubai’s biggest projects. Today, he has sought refuge in India after allegedly leaving a trail of bounced cheques totalling Dh18 million (US$4.9m), and faces jail if he ever returns. Mr Haq, 50, the chief executive of the Sanali Group, is just one of many developers who have left Dubai after pitching to investors with glossy magazine adverts and roadside billboards to buy luxury apartments in buildings that never made it out of the ground. Seven months after returning to India, he is still making bold promises of repaying the people who now hold his cheques.
“We tried to sell properties in Dubai and could not find any end users,” he said in a telephone interview from Hyderabad, where he now lives. “But we have around Dh4.5 billion of assets in India. I am closing a deal right now. Give me two weeks.” Like some other small developers in need of cash to fund their projects before the downturn, Mr Haq had convinced investors into buying properties by assuring them that he would buy them back at a later date at a higher price, guaranteeing the deals with post-dated cheques that have now bounced.
Property insiders call such deals “buybacks” – transactions that are seen only in rapidly rising markets fuelled by speculators. During the peak of the Dubai property market last year, investors bought and sold off-plan properties in rapid succession, in a practice that became known as flipping. Mr Haq is said to have promised buyers a return of up to 30 per cent on deposits they had paid on apartments located on Sheikh Zayed Road and in Maritime City, another development in Dubai.
When the market turned and prices started to fall, however, the scheme quickly unravelled and Mr Haq was arrested and taken into custody more than once before being released after agreeing to pay off the investors who had brought the complaints. He later left the country. The Real Estate Regulatory Agency in Dubai warned investors in November to be cautious about entering into such buyback arrangements.
A Dubai police officer said: “Mr Noorul Haq is wanted in the UAE. There are 15 cases now against him for bounced cheques that amount to several million dirhams.” A police officer at the bounced cheques department said: “He was arrested in Bur Dubai for a short period in January. One case was filed at the Jebel Ali police station and 14 at Bur Dubai.” Unlike several other developers who became involved in buyback deals in the UAE, the Sanali Group had a record in property development in India, where the company has launched about 30 projects and completed about half of them, according to its website. But in Dubai the group has not built any of the 11 towers it launched.
Mr Haq left Dubai in February but insisted he was open to talk to his investors. “I did not run away but if I go to Dubai now and something happens to me, I can neither sell nor pay anything,” he said. “I am available to all my customers through video conferencing and I always pick up the phone.” The Sanali Group website describes the company as “a trailblazing construction company that is at the forefront of the infrastructure revolution”. The section on Dubai claims: “It is estimated that by 2009, based on current growth, your initial financial investment is expected to at least double.” It is unclear when the website was last updated.
Despite the claims on the Sanali Group website, Mr Haq acknowledges that some of his projects will be cancelled. But he hopes he can sell others. “I have invested around Dh200 million in Dubai. We have 11 projects” he said. “Four towers will be cancelled, including Sanali Hanover and our project on Palm [Jebel Ali]. We can sell plots of land. We have six towers in Dubailand for instance; we can consolidate them into three.”
But some investors remain sceptical that he will raise sufficient funds to repay them. A former sales agent with Sanali who did not want to be named said: “Noorul Haq is used to asking for another two-week deadline. He has been saying that to investors for six months.” The agent claims to have invested Dh800,000 in a Sanali buyback but does not hold a cheque. Hisham Ansari, another investor, recently travelled to Hyderabad to meet Mr Haq. “We have waited for almost two years and he has not started anything. All investors are joining hands now.”
Back in Hyderabad, Mr Haq still talks using the language of the property tycoon, frequently referring to large sums of money and forthcoming deals. While his promises may be questioned by many of his investors, he blames the downturn for what went wrong with his company. “I never thought that the market would go down,” Mr Haq said.