Sheikhs, Lies and Real Estate: The Untold Story of Dubai (27 page)

Then I decided to research the architect Robert
Hopkins. There were various links to his name, mostly interviews he had done in
which he spoke of his confidence in Dubai and his hope to design something in
the city. I found a biography, which stated he had graduated from the
University of Leicester in 1972 and had developed hotels in New York in the
mid-1990s. So far, so good. The biography also stated that he had received an
honorary doctorate from the Halo Institute at Columbia University. I googled
the Halo Institute; nothing came up. I looked up the Columbia website for a
reference to the Institute; there was nothing. I was baffled, so I called the
university directly.   

‘Hello, is this Columbia University?’

‘Yes it is.’

‘I am wondering if you can put me through to
the Halo Institute. It’s part of the architecture faculty.’

‘Do you mind if I put you on hold, sir?’

‘Not at all.’

After a long pause, the receptionist returned. ‘I’m
sorry, sir, there is no such institute.’

‘I see. Perhaps I have spelled it incorrectly...’

‘Sorry, sir, there is no such institute with
any similar name.’

‘Okay. Just one more question, do you have any
records of a Robert Hopkins in your alumni?’

Again I was put on hold. ‘Sorry, sir, there is
no record of that name.’

‘Thanks for your help today.’

‘My pleasure. Have a nice day.’

I was confused. Could there be an error in
Robert’s official biography? Or had I made some kind of mistake? I immediately
turned my attention to Karim and Escape Investments. There was no website and
no mention of Escape or Karim anywhere on the net. My heart began to sink, but
I calmed myself down. There was surely a rational explanation. Perhaps the
project was so secretive that it would be unlikely to have any press coverage
at this stage. I was probably getting worked up over nothing, so I decided to
switch off my laptop and head to bed.

Rav pulled me into his office as soon as I
arrived the next morning. ‘I need to speak to you. Look at this!’ He opened an
email and turned his laptop to face me:

After conducting our due diligence on the
prospective buyer of plot number 238 in the Dubai Marina, we have concluded
that the buyer does not meet our minimum due diligence requirements, so we have
regretfully decided to terminate the transaction.

Best regards,

CEO’s Office

Emaar Properties

‘What the hell does that mean?’ I cried.

‘It means your guys are not for real. The deal
is off,’ replied Rav.

My legs turned to jelly and I felt physically
sick. This couldn’t be happening. I tried to call Cameron, but his phone went
straight to voicemail. I tried to call Karim too, but the same happened. What
was the use? The deal was dead in the water and there was nothing I could do
about it.   
 

The full story broke a month later across the
newswires. Hopkins had never received an honorary degree from Columbia and the
Halo Institute was a fabricated institution. Worse still, Hopkins had not
formally practised architecture for decades and had never designed a skyscraper
before the Rotating Tower. When confronted by the media, he simply answered, ‘I
have not designed skyscrapers, but I feel I am ready to now.’ Hopkins’ choice
of Dubai as the first destination for his unproven concept made perfect sense.
Not only was it the only place that would take such an insane and untested idea
seriously, it was also the only city that would fail to question whether it was
possible at all.

The press also uncovered that Escape
Investments had no track record in property. Karim had made his wealth
importing used cars and had been introduced to Hopkins by a mutual friend.
Impressed by the concept, he took a punt and decided to make the Rotating Tower
his first property venture. The fact that it was a no go was hardly a blow to
his business interests, and he could simply go back to his philandering ways unscathed.

There was one last thing for me do. My heart
sank at the very thought of it, but I had no choice. I had to make the call.

‘Hi... I came in last week to put a deposit
down on a Porsche... Yes... The white 911 Turbo... That’s the one. I have some
bad news, I’m afraid. I’m going to have to cancel it... Yes, I’ll hold...’

Sheikh Mohammed was the first of a new breed of autocrat.
He did not reign over his subjects from an ivory tower as did many of his Arab
contemporaries. Mohammed was a much more hands-on and accessible leader, highly
adored and respected among his countrymen. Affectionately named ‘Sheikh Mo’ by
Dubai’s residents, he was a symbol of strength, ambition and peace for modern
Arabia. As he drove his white Mercedes G55 with the unmistakable ‘1’ number
plate along the Sheikh Zayed Road, he was greeted with fanatical admiration by
every passer-by, Arab and expat alike. Mo was the super-hero sheikh, and at the
turn of the twenty-first century his city was standing on the threshold of
greatness.

Mohammed personified the great trading heritage
of the Bedouins. He had taken the barren desert’s only abundant commodity,
sand, and sold it to the world as if it were gold. He was the ultimate merchant,
and extended this innate business sense to his style of government. Sheikh
Mohammed was not just a statesman; he was the chairman of a unique city-corporation
aptly nicknamed ‘Dubai Inc.’. This ‘super-conglomerate’ consisted of an
intricate network of companies, investment funds and corporations under the
umbrella of a centrally controlled holding company known as Dubai Holding. Its
far-reaching tentacles spread across a plethora of business interests including
aviation, leisure, real estate, hospitality, investments and logistics. The
underlying principle of Dubai Inc.’s business model was simple: diversification
backed by an unwavering ambition to be a leader in every field it entered.

Dubai’s unique government structure was a
critical ingredient in its sudden success. The absence of a cumbersome
democratic process meant there was no time wasted on formulating manifestos,
debating political ideas or canvassing for votes. Centralised decision making
was opportunistic and nimble, and the government’s constituents had complete
confidence in the choices of its ruler, who ploughed ahead unchallenged. But neither
did central administration equal central planning; Dubai had no time for
socialist models of wealth distribution. It was as capitalist as any Western
administration, and there was no question that the overarching objective of its
government-run entities was solely to make money. 

From the outset, it seemed that Dubai Inc.’s
business model was flawless. The economy was the fastest growing in the region,
foreign investment was flowing into government coffers and Dubai’s companies
were fast becoming global leaders. And as the money rolled in, the sheikh went
on a global shopping spree of trophy assets across the globe. Through its
investment arms like Dubai International Capital and Istithmar, Dubai bought
substantial stakes in blue-chip companies such as DaimlerChrysler, General
Electric and US department store Barneys. With its new-found prominence, the
city was beginning to flex its financial muscles on the global stage, and it
was only a matter of time before its bold actions ruffled some powerful
feathers. 

When Dubai Ports World, the prized shipping and
logistics conglomerate, placed a bid for British firm P&O’s interest in a US
port terminal, a full-scale political crisis erupted. In the post 9/11 world, Republican
opponents raised fears over the security risks of allowing a Middle Eastern
operator to control US ports. Similar concerns arose over Dubai’s subsequent bid
for Doncasters Group, a UK manufacturer of components for military aircraft. Suddenly,
the Emirate was making enemies in high places and despite the government tactfully
backing down to avoid sparking a full-scale diplomatic disaster, suspicions grew
about its ulterior motives. Dubai, it seemed, was becoming as infamous as it
was famous.

There were two main sticking points for Dubai’s
detractors. The first was its flourishing relationship with Iran. Dubai had
historically closer links to Iran than other Arab states, and its trading ties
today were unprecedented. Dubai’s ports were a key transshipment point for both
legal and illegal Western goods passing into the Islamic republic, and it was by
far Tehran’s biggest trading partner. Dubai was also the most popular
destination for Iranian investment, as billions of dollars of capital found their
way into the city’s booming real estate sector. This ‘special relationship’ was
not looked on fondly by Washington, and in the context of increasing political tensions
over Iran’s nuclear ambitions, Dubai was quickly demonised as an ally of the
rogue regime. 

The second concern was Dubai’s alleged links
with international terrorism. Since 9/11, a raft of investigative journalism
had sought to expose the Emirate’s role as a financial intermediary for
terrorist funding and money laundering by militant Islamic groups. It was
implied that the city’s state-sponsored banks had been directly involved in
facilitating the transfer of funds for illicit means, and that its unregulated
gold and property markets provided a platform to convert the proceeds from
opium rackets into US dollars. There were stories that Osama Bin Laden enjoyed
a close personal relationship with the Maktoum dynasty, and that a CIA-ordered
strike to assassinate him in 2006 was aborted when he was seen hunting with a
prominent member of the Emirati royal family. Further questions were raised as
to why Dubai itself had never been the victim of a terrorist attack despite its
liberal values and ambiguous Islamic ethics.

Such allegations inevitably raised questions
over the true source of funding for Dubai’s booming property market, as the
official story became increasingly dubious. They certainly went some way to
explaining how projects worth in excess of two hundred billion dollars had
emerged in less than five years. African warlords, Russian mafia and the Indian
underworld were all believed to be washing their money in Dubai property, and
providing the lifeblood for the industry’s explosion. Thousands of empty
apartment blocks and unoccupied villas across the city vindicated the
allegation that they were simply instruments to launder dirty money. Of course this
was officially denied, and in response to the allegations, the authorities
implemented new legislation to combat any illegal movement of funds. But as
Dubai’s property ATM continued to spew out cash daily, changes were implemented
shway shway
and without urgency. It would, after all, be imprudent to
rock the boat too much...

***

‘Yes! Yes!!’ I was startled by the sudden commotion on the
sales floor. ‘I don’t believe it!’

I rushed over to see most of the team huddled
around the desk of Syed, a young salesman from Pakistan who looked as if he had
just won the lottery.

‘What’s going on?’ screamed Edward as he
stormed into the middle of the group.

‘Syed has just closed a huge deal!’ replied George,
who was massaging Syed’s shoulders.

‘What did you close, Syed?’ demanded Edward.

‘Three buildings I think, sir,’ Syed was
struggling to compose his nerves.

‘Three buildings?’ echoed Edward. ‘Well, who is
the investor?’

‘I don’t know him. It was a cold call,’ replied
Syed, still shaking. ‘He just said he wants to buy three buildings in
International City for cash. He’s coming in to close the deal tomorrow
afternoon.’

Edward rushed straight to Tariq’s office, while
the sales team gathered around the hero of the day.

‘Well done, Syed,’ said Ashan with a high five.
‘Let me know if you need any help in closing the deal.’

‘Syed, great news!’ echoed Omid.

Even Connor came over to offer his
congratulations. If Syed completed, this deal would be the largest in
Milestone’s history and would trump him for the first time as the top biller.

‘Thanks, guys,’ Syed replied, relishing his
moment in the sun. Having been with Milestone for over a year, the biggest deal
he had closed before this was a three-bedroom apartment in Ajman. Shortly his name
would be shooting up to the top of the Milestone sales board to occupy the
coveted number one spot.

Edward emerged from Tariq’s office. ‘Syed, can
you come inside for a moment? We would like to have a word.’

Syed did as he was told and disappeared from
view as the speculation on the sales floor continued. Who was the mysterious
buyer? Where was he from? Would he buy more buildings? And was there a way to
muscle in on this deal? Syed was not seen for the rest of the day, and the
murmurs continued until late. I was just as curious as the rest of the team
about the mysterious investor. I asked Rav for the inside scoop.

‘It seems the buyer is real,’ Rav confirmed. ‘He
will apparently be coming into the office tomorrow to secure the buildings.
Tariq wants you to be at that meeting too. We may be able to convince him to
put some money into the fund.’

‘Sure, of course I’ll be there.’

The next morning, there was nervous
anticipation in the Milestone office. The mysterious cash buyer was due to
arrive at two, and every member of the team was intrigued to see who he was.
The women dressed in their shortest skirts and highest stilettos in the hope of
catching his attention for possible future transactions. Syed himself had
bought a new suit for the occasion in anticipation of the biggest cheque of his
life. He was set to make half a million dirhams in commission on the deal; a
decent sum for answering a phone and taking down some details.

As the clock struck two, Rav picked up his
phone, nodded and hung up. ‘He’s here. Let’s go.’

We headed down towards the boardroom together.
As we entered, Edward and Syed were already sitting at the table. To their left
was a beast of a man dressed in a black leather jacket and a t-shirt. He had
pale skin and short, crew-cut hair, and there was a distinctive scar along the
length of his left cheek. He was sweating profusely and looked awkwardly
restless. On the table in front of him was a black briefcase, which was
attached to his wrist with a silver handcuff.

‘So we are all here now?’ he asked abruptly in
a thick Russian accent.

‘Yes, we are, sir,’ replied Edward. ‘Gentlemen,
this is Mr Vladimir, Syed’s investor. He would like to talk to us about his
intention to buy three buildings in International City, which I am certain we
can help him with.’

‘I want to close the deal quickly and I want to
pay all cash. And no bullshit,’ mumbled Vladimir.

‘Of course!’ said Edward. ‘Mr Vladimir. We will
do everything in our power to close the deal as quickly as possible, I promise
you that. Mr Rav Sidhu here heads up our business development team, and they
have already identified three buildings in the France cluster of International
City which we think would be an ideal location for your requirements. Would you
like to arrange a viewing of the buildings this week?’

‘I don’t care which buildings,’ he growled. ‘Any
three buildings in International City are okay with me. I just want to close
fast.’

‘I assure you, Mr Vladimir, these are the best
buildings we have available,’ Edward insisted.

‘Then I will take your word for it.’ Vladimir pulled
out a key from his jacket pocket and unlocked the wrist cuff. He opened the
briefcase and turned it towards us to reveal its contents. I almost fell off my
chair. It was full of perfectly arranged, crisp, one thousand dirham banknotes,
just like in the movies. I had never seen so much money in my life. ‘This is
ten million dirhams in cash. I will give you this as a guarantee today and I
will pay the rest on signing the contract.’

Edward was almost crying tears of joy. ‘Of
course, Mr Vladimir. We aim to please.’

‘Good. I hope there will be no problems closing
this deal. I want everything to go smoothly.’

Rav interjected, ‘Mr Vladimir, I hope you
understand that before we accept this money we need to conduct our internal
compliance checks as a matter of protocol.’ Edward did not look pleased.

‘I am a businessman, Mr Sidhu,’ insisted Vladimir.
‘I am involved in oil and gas deals in Russia. I have done very well in the
past few years and I would like to invest my wealth in Dubai. What more do you
need to know?’

‘Thank you, I appreciate your honesty,’ replied
Rav. ‘But I’m afraid we still need to conduct our own due diligence before we
can accept any funds from you. It’s a matter of process. I hope you understand.’

Vladimir jumped out of his seat. ‘What the hell
is this? I am not here for a fucking interview! I have come to you to offer my
business because I have heard you are the best brokerage company in Dubai. If
you do not want my business, I will go somewhere else.’ He slammed the briefcase
shut and prepared to leave.

Edward leapt out of his chair to stop him. ‘No,
Mr Vladimir, we certainly don’t want that at all. Mr Sidhu was simply asking
out of protocol. If you do not wish to answer any questions, we completely understand.’
He stared at Rav, who was shaking his head. ‘Now, let’s get back to business,
please. We will draw up the paperwork and fax it to you first thing tomorrow.
We can have the deal closed in three days.’

Vladimir paused and, looking into Edward’s
desperate eyes, began to calm down. ‘Okay, I will leave this suitcase with you
now, and the remaining funds will be with you when the contracts are ready.’

‘Thank you, Mr Vladimir. Thank you so much.’

‘I will be back to sign the contracts. Make
sure they are ready.’

Before Vladimir left the room, I saw my chance
to pitch the fund. ‘Mr Vladimir, I head up the investment team here and I would
also like to bring to your attention that Milestone is setting up a real estate
fund that you may be interested in participating in. Provided everything goes
smoothly with this deal first, of course.’

He paused and stared at me. ‘Tell me more.’ So
I gave him the thirty-second elevator pitch I had prepared the night before and
waited for his response. ‘This sounds very interesting. If we can close this
deal, I will consider putting some capital into this fund. Now, gentlemen, I
need to leave. I will see you in three days.’