Dubai developer Union Properties swung to a net loss of Dh966.76 million ($263m) in 2021 from a net profit of Dh200.98m the previous year despite a rise in revenue after it rectified the value of its property portfolio that “had been inflated in prior years” and the company is now restructuring operations.
Revenue from contracts with customers rose 6 per cent annually to Dh398.7m last year, largely driven by the recovery in the UAE’s real estate market as the country rebounded from the coronavirus slowdown, it said in a statement to the Dubai Financial Market, where its shares are traded.
A new board, appointed in December, changed the company’s independent valuer and found that the carrying value of its property portfolio “had been inflated in prior years".
Union Properties booked Dh1.11 billion in 2021 losses from the valuation of its properties compared with a Dh743.6m gain the previous year, leading to an overall loss last year.
The company also faced an impairment of Dh154.64m relating to investments in quoted funds and quoted equities, which are “suspected to have been misappropriated by the company’s former officials”, the developer alleged.
Union Properties' shares were down 4.12 per cent to 23 fils on the DFM at 10.31am UAE time. They are down 28 per cent since the start of the year.
“2021 has been a difficult year for Union Properties, as we uncovered widespread fraud and misconduct by the company’s former management involving forgery, misappropriation of funds and various other financial violations,” said Amer Khansaheb, board member and managing director of Union Properties.
“These have negatively affected the company’s financial health and been a severe breach of shareholder confidence.
“We have commenced the implementation of an emergency business restructuring programme to restore shareholder value, and negotiations are continuing with our two major creditors banks to restructure the loan facilities. Good progress has been made with one of the local Islamic banks, and we remain in constructive discussions with other major creditor bank.”
Mr Khansaheb said the company will continue to review its entire portfolio to determine where it could generate further value and liquidity through the disposal of non-core assets.
The Securities and Commodities Authority (SCA), the UAE's markets regulator, filed a complaint against Union Properties' senior executives in October last year, accusing them of selling one of the company's property assets at a price below its real value, forgery, abuse of authority, fraud and damage to the interests of the company.
A new board was appointed in December, and a complete financial and accounting review was conducted by a third party.
The preliminary findings included “violation of accounting standards and manipulation of records as well as misappropriation of funds and properties along with other violations, which took place over several years”, Union Properties said.
We have commenced the implementation of an emergency business restructuring programme to restore shareholder value, and negotiations are ongoing with our two major creditors banks to restructure the loan facilities
Amer Khansaheb,
board member and managing director of Union Properties
In a separate filing to the DFM, the company said it is taking measures to address the accumulated losses, including presenting a recovery plan to the SCA; developing a business plan that focuses on closing out existing projects and refocusing on core business activities to win new projects; improving efficiency; recovering misappropriated funds through legal measures; restructuring outstanding debt to reduce financial costs; recovering outstanding receivables through court and arbitration; developing its land bank; and focusing on cash generating activities, among others.
Union Properties' new management team is also developing a growth strategy to generate shareholder value, the statement added.
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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South Korea
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Company%20Profile
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LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
COMPANY%20PROFILE%20
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Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
