Fear for Aussies in Dubai cells
- Royce Millar
- March 2, 2009
The Atrium that was to be developed by Sunland Group in Dubai.
A vision of gleaming new cities in the desert has proved to be a mirage for Australians lured by Middle East riches.
THREE property industry high-flyers, including the senior agent of a company part-owned by James Packer, are among a growing number of Australians under arrest or investigation in Dubai as a supposed development miracle has succumbed to the world financial crisis.
Australian authorities have confirmed that 13 Australians are under arrest in Dubai over charges or allegations ranging from bribery to failure to pay bills.
A legal source in Dubai has confirmed that among those in jail or under effective house arrest over property-related bribery allegations are:
*Marcus Lee, until recently a senior executive with the Dubai Government-controlled Nakheel development company. He is a former executive with Australian companies Jones Lang LaSalle and Investa. Mr Lee is in jail without charge.
*Mr Lee's Nakheel colleague Matthew Joyce, a former Melburnian who is also in jail without charge.
*David Brown, head of the Sunland Group in the Middle East, a Queensland-based development company part-owned by Mr Packer. He has been interrogated at least four times and has had his passport confiscated.
They are of particular concern to lawyers and the Australian embassy because of the seriousness of the allegations and the uncertainty about their future. United Arab Emirates law allows suspects to be held indefinitely without charge.
It is believed the allegations involve millions of dollars in consultancy payments by Sunland to Nakheel and a third party over a waterfront property purchase.
Nakheel is one of four development companies linked to the government and ruler Sheik Mohammed bin Rashid al-Maktoum.
Mr Lee and Mr Joyce have been in solitary confinement since January 25. They have been allowed only limited access to lawyers and family.
Martin Amad is Mr Lee's and Mr Joyce's Melbourne lawyer. He refused to identify Mr Lee by name or discuss details of the cases. But he said he was anxious for his clients as they entered their second month in custody without charge. "We're concerned for the welfare of the accused in custody where they've been kept in solitary confinement. Their physical and mental health has deteriorated. We are becoming increasingly frustrated at the time it seems to be taking for the prosecution authorities to investigate the matter."
Mr Amad said he was confident that after the prosecution was made aware of the full details of the property deal, the case against his clients would be dropped.
Foreign Affairs Minister Stephen Smith recently cautioned Australians overseas to be aware of, and comply with, local laws.
Commenting on the 13 Australians under arrest in Dubai, a Department of Foreign Affairs and Trade spokesman said: "The United Arab Emirates legal system is different to the Australian legal system. People who are under investigation can be held in detention for long periods of time without bail."
In the mid-2000s, Dubai began marketing its plan for a property-led future: instant megacities underwritten by billions in sovereign wealth.
Thousands of Australians in the property industry flocked there, lured by tax-free work and projects underpinned, apparently, by government cash.
Among them were prominent local figures such as ex-Docklands Authority boss Jon Tabart, former City of Melbourne chief executive David Pitchford, senior Bracks government planner and bureaucrat Lindsay Neilson, builders Grollo and architects Woods Bagot.
Experts estimate that, at the peak of the boom, a quarter or more of the world's cranes were swinging on Dubai's new skyline.
But it came to a screaming halt last year as Nakheel pulled the pin on a proposed 1000-metre skyscraper. The Government's cash proved to be debt after all, and speculation-driven development meant 40,000 cranes had been building a house of cards.
Expats from around the world fled in their thousands.
Among those left there is real fear as stories spread of Australians, Americans and others going missing, only to turn up in prison days later.
Whether the allegations of bribery and other offences prove true, some close to the Dubai scene say authorities are seeking scapegoats.
'There is a lot of face-saving to be done," says one Melbourne property player well versed in business in Dubai.
"The sheikh can never be responsible, so somebody else has to be."
Most Australians interviewed for this story would not be identified. "You have to be really careful. It's not a democracy here," one said.
An exception is Karl Fender, co-founder of Fender Katsalidis.
He said in Melbourne his company was involved in a string of projects, most of which had stalled.
One scheme involved the construction of thousands of villas. In September 1600 sold. In October, only one sold.
Mr Fender said the Dubai phenomenon always felt shaky.
"Dubai was a place in a hurry. It was based on a hard-to-define marketplace, and built on a frenzy of speculation," Mr Fender said.
Last week, The Age sought comment through the UAE embassy in Canberra.
The embassy did not respond.
Sunland's Mr Brown did not respond to phone calls or emails.
Sunland's managing director in Australia, Sahba Abedian, confirmed Mr Brown had been interviewed by police, but insisted his company was not implicated in the investigation.