Monday, June 08, 2009

Ebony & ivory

Gulf News today ran a press release from Al Fajer Properties saying that all its projects are on schedule.

They say they voluntarily asked for a construction audit to be carried out by a RERA-approved independent party.

Sounds boring I know, but stay with me.

The press release includes the information:

The results confirm that work on Phase 1 has neared 80 per cent completion and 15 per cent of construction has been completed on Phase 2 (including the Ebony and Ivory Towers) with work continuing.

That reference to Phase 2 is the important bit.

A week ago the UK newspaper The Independent ran an article headlined "Dubai property scandal claim emerges amid media blackout"

It's full of sensational accusations.

It claims that customers were misled into paying millions of dollars by the use of fake photographs, which showed construction of three buildings, purported to be Ebony 1, Ivory 1 and Ivory 2, up to the sixth storey. It says that the photographs were in fact of buildings on neighbouring plots and the three towers are actually empty holes in the ground.

It goes on to say that angry investors were in the city, they had alerted local and regional media and a press conference had been arranged. But it says the press conference was cancelled on a pretext, that there was a media blackout ordered by the authorities, that government officials ordered news agencies to 'pull' stories which were appearing on websites.

To add even more spice they include 'links to the ruling family of the UAE city-state' a couple of times in the article. The President of Al Fajer Properties is Sheikh Maktoum Bin Hasher Al Maktoum.

Now the PR battle is on.

Without, of course, any reference to the accusations, the company says the independent and approved auditors confirm that 15 per cent of this project's construction has been completed and work is continuing.

They say that The audit affirms that Al Fajer Properties have attained the highest level of transparency and is in full compliance with all Rera rules and regulations.

They also say that progress on the project will be available on the Rera website shortly.

I think this is a pretty good example of how a company should react in the face of such accusations.

Compare it with the usual principle used here of ignore it and it'll go away. Atlantis and the whale shark are a classic of the usual method.

Accusations have been made which the company faces head on. They enlist offical help in the shape of RERA, use independent and approved auditors, link in with the official RERA website.

Then they issue a well constructed press release covering all the points and including lots of positive comments. They also use it to not only align themselves with RERA but to remind us of the professional standing of RERA.

The ball is now firmly back in the court of the investors and The Independent.

It'll be an interesting story to follow.

What this PR doesn't do is answer the accusations of government interference, of media blackouts, of pulled stories. Nor should they, it's not a company's responsibility to answer those accusations, but I'd like that side of it to see the light of day.

If you'd like to start at the beginning, The Independent has the story by 'Heerkani Chohan', "the pseudonym of a journalist living and working in Dubai". That story is here.

Al Fajer's answer to the accusations is here in Gulf News.


Rootless said...

You say:
"The ball is now firmly back in the court of the investors and The Independent."


I think we would all agree that no recovery in the Dubai property market will be achieved without renewed investor confidence. Most of those investors will have to be from abroad and will not have access to the inner workings of Dubai's government. Therefore transparency will be critical to rebuilding confidence, particularly for investors who will be extra wary of the risk should anything go wrong dallying with such a well-connected firm. And particularly a firm like Al Fajer, and its associated enterprise Dynasty Al Zarooni, already subject to several credible accusations of serious impropriety from a number of sources. This link is just a tease - if you google either of these companies there is a treasure trove of material:

You honestly think that a statement from RERA in an article in Gulf News referring to unspecified third party auditors addresses this issue of confidence? Assurances from RERA, a Dubai government agency (whose CEO in late April assured us that they would keep their promise of an update to the rental index in April) should satisfy us all that everything is fine. A statement from Al Fajer is all it takes - no tour of the construction sites for journalists, no internationally recognised auditor (who should be acceptable to the investors), not even any pictures (verifiably real ones this time) or any other evidence whatsover????

Of course the Gulf News is an icon of impartiality and integrity and can be trusted much more than a paper with the international reputation of The Independent, merely Britain's most respected quality newspaper.

So we'll take the assurances of a craven propaganda rag, a discredited government agency and a seriously tarnished firm (and we haven't even mentioned conflict of interest) and the burden of proof now rests with the Independent and the investors???

Only in the parallel universe of Dubai.... Don't the people churning out this stuff (and you, Seabee) realise that if they keep up these feeble whitewashes and contradictions of obvious reality they will only delay or even destroy any chance of recovery here? And they actually believe that this won't blow up in their faces????

Seabee said...

Rootless, what are you screeching on about?

It never ceases to amaze me that comments are left on blog postings which have nothing to do with the post.

I didn't post about the recovery of the property market, investor confidence, transparency, the relative merits of newspapers, whether either report is believable.

I posted about one particular story and the PR involved in it. That was the subject of the post and that's the ball I said is back in the investors and The Independent's court.

How they will react to the press release is what I'm talking about.

Press release, note, as I said at the beginning of the post, not an article by Gulf News as your rants about them say.

By the way, I love the irony of you giving a link to Gulf News to support your rantings in the same comment as calling it a 'craven propaganda rag'. Great stuff!

Siwash said...

Unfortunately, many stories like this will appear. My case is Remram from Mizin which is using RERA as its own authority to keep all of my money instead of abiding by the contract and return to me 15% while retaining 10%. The only thing that I can say is: Government of Dubai, fool me once shame on you. Fool me twice, shame on me. I have decided to try and not spend a single unnecessary dirham more in Dubai. Consumer confidence is shattered, and this is from someone who has been here for 11 years.

Rootless said...

Seabee, you don't see how utterly connected these things are? You don't recognise that this Al Fajer story goes absolutely to the heart of confidence not just in Dubai's property market, but in Dubai? Much more profoundly than silly opinion pieces by Guardian writers who think they were the only ones (or even in the first million) to dredge up a sad Ozymandias allusion. Much much more than sanctimonious documentaries about awful conditions in labour camps.

You really think that the article and statement that you have posted about addresses either the specific accusations or, more importantly the broader context, in any credible, impactful way? That there is anything in there to which the investors or the article writer can respond? That in fact it doesn't just make things worse in it's arrogant dismissal of the issue and assertions so full of holes it looks like O14 (a wonderful building which is actually being built)? Just watch this develop.

If this is the official Dubai response in the "PR war" then we can pack up and go home and leave the place to the camels..

The point of linking to GN was to show that EVEN in there, the Al Fajer/DZ stories were unavoidable. Check the meaning of irony by the way (I think you've been corrupted by that Alanis Morisette).

Anonymous said...

According to this there were newspaper adverts showing the progress on Ebony and Ivory in July last year, but the company admitted they still hadn't appointed a contractor in February this year. They are being investigated by Dubai public prosecution so I presume there's something in it. Not just a pr war, a legal war.

Anonymous said...

what i do see about this blogsite is its ability to jump to conclusions favouring what seems to be a clear-cut case for most, quoting sources that are not exactly paragons of impartiality.

there are photos published of the site with no buildings, so if the company wants to convince me, all they need to do is what they have not done. publish photos of the progress of the exact towers in the articles in the independent.if you have nothing to hide, go to where the problem is. dont publish rubbish in papers in a region where people did not even know there was a problem. instead of this, they have brought in some highly dubious sources to testify, which are anyway all owned by the same family. and a govt. controlled newspaper to publish this news. yeah yeah...i know...rera is independent, dubai is a democracy, gulf news is a beacon of independence, so on and so forth.

i am not saying who is right or wrong in this, i am just saying the company has done nothing to reassure me that the building is there. instead of that it sounds like a lot of spin to me. empty blocks...i need to see built buildings, not names of rera and gulf news thrown at me. as for all the data on cancelled press conference, news blackout...i dont think anyone with any sense thinks this actually did not happen. it has been known to happen before, and will happen again. if there was nothing at all to hide, why the cloak and dagger.

Seabee said...

~Rootless, of course I'm aware that everything is connected in some way to everything else. That isn't the point. I posted about one small aspect of one story, you rambled off into a vastly larger picture of which it is one small part. And you're still doing it.

The post wasn't a complex attempt to analyse the entire real estate industry, economy, media, laws and transparency of Dubai.Your comments would be relevant if it had been.

You've got yourself so infuriated by the subject that you can't see the wood for the trees. Where do opinion pieces with which you disagree come in, or labour camps, or 014? How do you see 'the official Dubai response' in a press release from one private company?

Keep it all in mind and when I post again, as I've done several times in the past, about the property market in general, in plunging business confidence, in the need for transparency and laws, that'll be the time to bring it all out.

Irony (from the Ancient Greek), meaning hypocrisy...

Anon@1.02, yes there is something in it and it's not just a PR war. I was simply talking about the exposure in The Independent and this PR steps the company took.

There will, I'm sure, be legal action. As the investors' group spokesman said, "The next step will be to go legal.”

Seabee said...

Anon@1.30 I agree with you entirely, on the claims, on the media blackout, on "i am not saying who is right or wrong" - neither did I.

The press release from Al Fajer has put the PR ball back with the investors and The Independent, as I said.

That's because Al Fajer have now made claims contradicting the investors and The Independent, quoting independent sources to support them.

If they want to continue it the investors and journalists should now photograph the site, then publish the two sets of photographs together with their story. Presumably the investors will need such evidence anyway to support their accusations if they decide to take legal action.

You began your comment with this. Can you explain it, because I don't understand it:

"what i do see about this blogsite is its ability to jump to conclusions favouring what seems to be a clear-cut case for most, quoting sources that are not exactly paragons of impartiality".

I didn't jump to nor express any opinion on the subject. I did not favour either side. I quoted from and linked to a press release, identifying it as such. I made no comment about the impartiality or otherwise of the sources it included.

So your complaint is...?

I also did not say that I agreed with the claims made in the press release, I said they'd handled the accusations well, that this was the way to do it rather than the usual 'ignore it' approach, that it was a well constructed press release.

As for the media blackout stories, I said I'd like that side of it to see the light of day.

Like Rootless you're somehow reading things which simply aren't there.

Rootless said...

Seabee, you said in response to Anon@1:30:
"The press release from Al Fajer has put the PR ball back with the investors and The Independent, as I said."

You said it twice and clearly Anon and I both disagree.

Then you said:
"I didn't jump to nor express any opinion on the subject. I did not favour either side. I quoted from and linked to a press release, identifying it as such."

But you did express the opinion that it put the ball back in the court of the investors and Independent. It is with this opinion that we do not agree (sorry Anon for speaking for you but I think this is clear from what you said).

In fact, as I said (or screeched or rambled as variously characterised by you), I think this statement and accompanying puff piece in the GN made it worse because of all of the highly relevant context that I mentioned by way of explanation. A context, by the way, which you deem irrelevant here but which ALL of the other respondents to your post have addressed.

Further you said:
"I also did not say that I agreed with the claims made in the press release, I said they'd handled the accusations well, that this was the way to do it rather than the usual 'ignore it' approach, that it was a well constructed press release."

But they did not even address the accusations, let alone handle them well. That is the point. They isssued a flawed and derisory satement carried unquestioningly by GN, which as a newspaper surely has the duty of doing some fact-checking for themselves. I'm not infuriated - though I certainly understand why the investors are - just disappointed that you let such an obvious travesty of the truth pass by so blithely. Compared to, say, how outraged you were by the comparatively mild innaccuracies in other pieces about Dubai... Now that's much closer to irony (in it's not generally accepted use to mean incongruity).

PS not sure where you got your dodgy definition of irony (which of course isn't a definition, it's a root; and even that doesn't tally with on a quick search: [French ironie, from Old French, from Latin īrōnīa, from Greek eirōneia, feigned ignorance, from eirōn, dissembler, probably from eirein, to say.]) Irony of ourse means:
The use of words to express something different from and often opposite to their literal meaning.

Seabee said...

Rootless, "But you did express the opinion that it put the ball back in the court of the investors and Independent. It is with this opinion that we do not agree (sorry Anon for speaking for you but I think this is clear from what you said)."

Ah, I see. That's what we disagree about. I agree, we disagree.

Anonymous said...

dont know whose balls are where, read below from 7 days, comments on real estate off plan buyer who lost her money in dubai. i repeat, this is not from any british publication known as the independent. no need to wonder where my sympathies are, with the cheaters, or the cheetees:

It's sad to hear of your loss and the question of sustainability comes to mind again. The most sensible purchase now would to buy into an existing development.
Posted by : Sandman On : Thursday 11 Jun, 2009

I feel really bad for you but these stories have come about often. Firstly all i can say is why did you even consider investing in property in this country after all the bad deals going on...your development is not the first, just look at the "waterfront" development that has been canceled or put on hold indefinately. I know of a developer who has two or three projects that were to be built in Waterfront, they launched and sold units only for the main company (you can guess which one, major uae company) to cancel the entire development! with no all the other property developers and their clients have all been screwed!!! This is the UAE and this is how they do business, there are NO rights for home owners...did u not do any homework? 1.5m for an off plan? Wow, that must be one hell of an investment that may never be. Good luck, really sorry to hear about your woes but i would personally never invest a dirham in this country.
Posted by : BoogieMonsta On : Thursday 11 Jun, 2009

Join the club...sad but true. Immature markets are high risk and reward. Too bad the long term committed investors /end users are bearing the brunt of this. Don't lose hope...keep pushing them to return your money. It's a stand off and they are waiting for you to back down first . We were waiting with bated breath for a list to be published by RERA declaring which projects will be cancelled. It was due to be out in the beginning of news as yet. Hopefully it will come out and things will be clearer at least in Dubai . But since RERA cannot enforce the law you will have to find a lawyer and go it alone.
Posted by : The Black Knight On : Thursday 11 Jun, 2009

Hi NW (name withheld) I too is facing difficulty with this property issues. We invest 2 units in Ajman but now everything looks dim and I cannot see any light at the end of the tunnel. Now I'm in the process of filing a case against the developer. I just hope and pray that this will help us get our money back. Consult with your lawyers, maybe they can help you sort things out. GOOD LUCK to all of US (property investors)..
Posted by : emme On : Thursday 11 Jun, 2009

Join the club as the saying goes - infact I know a local lady who has been trying to off load two properties for a year (as the headaches she receives are not worth it) with no joy. She even advertised Internationally (Europe, UK, USA, Arabia and Far East) and so far the agents told her - no interest due to people checking out Local Property Laws and ownership consensus. Talking about bad news travelling fast and adverse publicity. Good luck to all of you as I cant see a way out of your catch 22 mess for now. I must say letters like yours makes us breath a sigh of relief for not investing in property out here.
Posted by : A. A. Ali On : Thursday 11 Jun, 2009

NW, I feel for you. And while it may be simple for me and others to say 'you shouldn't have', the fact remains that Dubai and Abu Dhabi are advertising around the world, saying LIVE HERE, BUY HERE, INVEST HERE, and then screws up those honest people who do. Its ridiculous, but what I cannot fathom is how come not a SINGLE statement ever comes from the ruler's office, despite his name being used in all advertising: 'come see the vision of Shaikh so and so'. Hypocrisy.
Posted by : anthonypermal On : Thursday 11 Jun, 2009

Anonymous said...
This comment has been removed by a blog administrator.
Seabee said...

Anon@3.33 I deleted your comment because it was libel.

You began by saying:
Generally it`s sad to see to which direction you focus by this bad game of Al Fajer. Not a single journalist has taken attention to what Al Fajer is sending out by mass PR Answers

That was exactly my point in the posting, which was purely about the PR aspect of the story.

What I've been criticised for is that I said the PR ball was back in the investors/media court. It was and they have failed to respond.

The investors and The Independent began it by their claims of misrepresentation. The company responded with a PR campaign which has continued with another press release appearing a couple of days ago.

The investors and the international media have not responded, have not disputed the company's statements.

In a PR sense Al Fajer is winning.

Anonymous said...

Al fajer has ruined not only dubai real estate market but also the dubai ruling family's reputation. Just look at the court case against the sheikhs from their former CEO who is claiming to be the real owner of al fajer.
I am not even living in dubai so neither side means anything to me. However ,i can not accept that it is normal for the CEO to be detained 2 months without charges without any rights to a lawyer and when he gets out he is "fired". He has challenged the sheikhs in the court to show a single dirham of investment & he will give them the company & $10mil bonus!!! Surely the sheikhs who claim ownership of Al fajer should reply to this by showing their investments.

What is clear from all the stories in the media, Al fajer sheikhs have not done things right otherwise there wont be so many complaints against them in the courts by various groups.

Correct me if I am wrong, didnt your ruler said that nobody is above the law? how come the authorities till this day have not replied to the CEO's false imprisonment claim?

Sadly, dubai was one of my favorite places to visit but recently I have seen too many incidents that does not protray what the ruler preaches.

I hope everyone will get justice in this case and all other cases since many people have put their trust 7 life savings into "brand dubai".

FYI: Gulf news is owned by Obaid Al tayer, whose sister is married to sheikh hasher maktoum al maktoum, the Al fajer "owner" facing the $1.9 billion lawsuit. I have had the honor of doing an interior design for Mr. Al Tayer.