Deyaar cancels Indian realty deal amid fraud probe in Dubai


“The memorandum of understanding between Deyaar and Ansal Properties to develop a project in India has been terminated by mutual consent,” Nasser al-Sheikh said in a statement on the Dubai bourse website.

The announcement comes amid a financial investigation into alleged embezzlement at the company, which has already led to the detention of it’s former chief executive Zack Shahin and three other people in connection with the probe. Deyaar shares closed flat at 2.37 UAE dirhams ($ 0.64), after falling intraday to 2.31 dirhams. The stock is down almost 20% this year.

Ansal shares ended down 0.7% to Rs172.95 on the Bombay Stock Exchange. Termination of the agreement came into effect on Tuesday, Deyaar said in the statement.

Deyaar had agreed to take up to 40% stake in a project to develop a township comprising of residential and commercial real estate in India, according to an Ansal disclosure last year posted on the Bombay Stock Exchange website.

The company, which said in November it was mulling over a $ 5bn real estate project in India, added that it still plans enter the market and is in discussions with other potential partners.

Al Sheikh told Zawya Dow Jones in an e-mailed statement that the cancellation of the Ansal deal “is in no way related to the current and ongoing investigation by Dubai Police and the Public Prosecution on matters related to alleged financial irregularities at Deyaar.”

Deyaar said on May 1 that the ongoing investigation isn’t expected to hit profits.

The probe “will have no impact on the future profitability of the company since the incidents in question occurred in the past and had already been reflected in the company’s historical financial disclosures,” al-Sheikh had said in the May 1 statement.

No reference was made to the ongoing Shahin investigation in yesterday’s announcement to the Dubai Financial Market.


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