British investors with millions of pounds in a property scheme run by Sulaiman al-Fahim, the soon-to-be owner of Portsmouth Football Club, fear that their investments are at risk.
Since 2007, investors have handed over nearly £60 million to Hydra Village, a venture of Dr al-Fahim’s Hydra Properties. There has been no significant construction on the site in Abu Dhabi, in the United Arab Emirates (UAE).
British companies operating in the region — hit hard by the global slowdown — face similar problems and claim to be owed up to £50 million by UAE-based clients.
Dale Kavanagh, 33, from Leeds, who works for a valve company in the oil and gas industry, paid Hydra 290,000 dirhams (about £60,000) in 2007 as a deposit on a 1.45 million dirham villa. He has yet to receive a contract for the villa and now has written off the money as a loss.
After calling the company for months, he met Dr al-Fahim. Mr Kavanagh said: “There’s nothing happening at the site. They’ve built a few villas near the front so it looks like something is being done, but there don’t appear to be any utilities connected.”
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Hydra Properties was unavailable for comment. Talks between investors and the developer’s senior executives are continuing. Dr al-Fahim has said publicly that Hydra is “resilient and solid”. When the bid for Portsmouth was announced, he said: “Let me be very clear in saying that my involvement in Portsmouth has nothing to do with Hydra.”
A Dubai-based executive at one UK construction group told The Times: “It’s all very sensitive but we’re having trouble getting people to fulfill their contracts. There’s a lot of renegotiation on deals.”
For those whose clients become insolvent or refuse to pay them, there may be little redress. Crispin Rapinet, managing partner at Lovells, the law firm, said: “This is uncharted territory. There are insolvency regulations but they’re untested.”
Last month, an industry body said that almost £400 million was owed to British consultants and engineers in unpaid fees from work in the UAE.