Saturday, October 03, 2009

Khoie Properties denies insolvency allegations

Khoie Properties has denied insolvency allegations against the company, and emphasized that it continues to remain in control of more than Dh.1billion worth assets.

The firm also retains the Dh.700mn worth receivables as it owns the Dh.5bn La Hoya Bay project in Ras Al Khaimah.

The Ras Al Khaimah court recently appointed Rakeen as the official custodian of the project, which was a welcome relief for investors in La Hoya Bay.

The Chairman and Chief Executive of Khoie Properties, Frank Khoie is currently in jail, but, he is adamant that his company is not insolvent. Khoie Properties currently holds Dh.288mn worth investor money.

Out of this, about Dh.81mn was allocated for design, architecture and construction and engineering works, while Dh.72mn was paid to the Ras Al Khaimah government for the land.

Apart from the Dh.61mn which was given in as commissions, Dh.56mn was paid as salaries, and for promotions, advertising and administrative expenses, the company said. Another Dh.18mn was invested in the Ras Al Khaimah American School.

According to the company, the real estate market as a whole has been affected by the financial crunch, and Khoie Properties has been no exception. Therefore, the developer has claimed that accusations regarding insolvency are baseless, and Khoie Properties still has the ability to deliver the La Hoya Bay project to investors.

Khoie Properties had acquired six plots of land from Rakia, worth a total of Dh.302mn. When the first cheque for Dh.72mn towards construction was funded, controversies cropped up that the developer was unable to meet the Dh.57mn land payment in December 2008.

"Tightening credit markets, coupled with slow sales did bring about a slowdown in Khoie business. Funding for the project was much dependent on sales revenue, which had dried up completely," said Frank Khoie, who spoke to the media.

However, whether Khoie Properties will be able to take back control of La Hoya Bay, is yet to be watched.

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