Tuesday, March 18, 2008

Blue City Lawsuit - Janahi Speaks Out

For the first time since Cyclone (the Omani company that actually owns just 30% of Blue City) announced that they are suing AAJ Holdings to takeover their (70% majority) shareholding in the project, Ahmed Abubaker Janahi held a press conference in Bahrain yesterday to give his side of the story:

"An immediate intervention by the Omani government is now crucial, seeing as the minority shareholder is currently in full control of the project and has actively and independently started sales, disbursements and generating revenues - the whereabouts of which still remain unknown to AAJHC," Mr Janahi told a Press conference at the Mšvenpick Hotel yesterday.

"We have been wrongly and completely shut out with all references and our logo unduly removed from the project."

Prior to AAJHC entering into the project as a strategic partner, investment rights to the 32sqkm project were granted to Al Sawadi Investments and Tourism Company by the Omani government on an exclusive 75-year basis.

Mr Janahi said Al Sawadi failed to develop the land for almost five years, which is why AAJHC was brought in.

"It approached AAJHC, which developed the project concept by preparing the necessary business, feasibility and architectural plans with phased development implementation programmes and tapped into its international network of banking relationships to secure the $925 million required to fund phase one of the project," he claimed.

"Since then, AAJHC was the major stakeholder in the project - being the registered owner of 70pc of the shares of Al Sawadi Investments and Tourism Company, which it has acquired through documents legally registered at the Commerce and Industry Ministry in Oman.

"Cyclone was the Omani shareholder owning the remainder of the shares."

Mr Janahi claimed the dispute between AAJHC and its Omani partners began after phase one funding was secured.

"This funding resulted in the escalation of the project's land value from $83m to over $1bn for phase one alone and is further expected to increase to $20bn over the remainder of the life of the project, which in turn dramatically increases the value of the shares," he said.

Mr Janahi also claimed AAJHC would have negotiated with its Omani partners to sell 20pc of its shares, meaning it would become a 50-50 venture.

"Our investment, including the money generated from various sources for the project, will come to more than $100m," he added. [source]


Related post:


Blue City shareholders lawsuit

28 comments:

Anonymous said...

It all seems to be like one of those Russian dolls to me - there are so many companies hidden away within other companies. All a bit too sub-prime like eh? Regards, Ahmed

Undercover Dragon said...

I think AAJH is being set up to take the fall for the collapse (and hence need for Government rescue) of the project... That's why he's moving out into the open...

Amjad said...

I wonder for situations like this why do we always get to hear only one side of the story, and not get to hear the Omani side of the story... shouldn't a representative from the Omani company stand up and shed some lights ?!

Anonymous said...

I think on the Omani side this lot are too ashamed of their stupidity - which in turn would clearly show their rank cupidity. Seems to me both sides have been trying to shaft each other. I think it was UD who said (on his blog), that it was all a soap opera, but its not, its just a sad and crappy panto. I guess they will now run to HMG and plead that the Bahraini have been beastly to them and so HMG must once again bail them out for reason of 'face. Regards, Ahmed

suonnoch said...

AAJ Holdings was declared bankrupt in Bahrain last year, according to news reports.

From the outset, the plan proposed by the Bahraini company, in tandem with its Omani partners, was probably over-ambitious.

Again, from the outset, the financing of the project was suspicious. The dubious Oppenheimer Investments, the connection with Bear Stearns, the fact that parties named in early reports have been taken to court in the States, etc etc

What are the current finance arrangements? What commitments endure? Were appropriate legal measures taken in agreement with all parties to sever bonds with AAJ Holdings?

I agree with Amjad that it would be an extremely good idea for the Omani side to show transparency, but what will that expose?

I suspect that's it's appropriate to assume that 'face' will be saved. At what cost?

kelly said...

Wonder if it has something to do with Dick Cheney being here this week??...

Anonymous said...

Looks like the Miri guy is looking for a new job...

http://www.linkedin.com/pub/3/B14/64A

Run rabbit, run rabbit, run...

Word on my street is that Cyclone has run out of money and Miri is going to take the rap. Game over.

Undercover Dragon said...

Sue,

Do have have any links on AAJH being declared bankrupt? I on;y saw claims of bankrupcy in the law suits, which doesn't mean much. (Its common practice to claim the person you're suing is bankrupt to get them to move.)

And yes, why no comment from Oman?

suonnoch said...

The Bahrain Tribune has published a story today or yesterday announcing that the Oman judiciary has thrown out Cyclone's case against AAJ Holdings. I couldn't find it on the Bahrain Tribune site but it has been reproduced on Zawya and at Menafn http://www.menafn.com/qn_news_story_s.asp?StoryId=1093190041

Any confirmation from the Oman side?

suonnoch said...

I've had independent confirmation that it's true that AAJ Holdings won the court case.

muscati said...

Last week someone told me that the court was going to dismiss the case, and it happened! But this source told me that there was more than one case, which will probably all be dismissed. And it looks like Janahi himself is counter suing and even suing the banks which allowed release of payments from the project's accounts without his signature.

Anonymous said...

Ahaaaaaaa! Shah mat!!! Sic transit gloria mundi.

On. On.

Willie Dryer

Anonymous said...

I have been reading that AAJH has gone bankrupt... But I have been in several Realestate exhibitions and have seen another project that is being developed in Bahrain called Marina West at a total investment size of USD 610 million... and selling like Hot cake!!

which is all owned by AAJH!!!

http://www.marina-west.com/

Apparently its the opposite as due to my job I have found the prospective of the Bond and reading through it... It was depending on the financial of AAJH without mentioning Cyclone "Baring in Mind that the financial of AAJH have been audited by Ernst and Young"!!!

suonnoch said...

You can see a profile of AAJ Holdings Company, also known as AAJ Group, AAJH, AAJHC, Ahmed Janahi Holdings at http://www.zawya.com/cm/profile.cfm/cid1003039/

Listed developments include the Bahrain Financial Harbour and the
Marina West Gated Community Development. Follow links in the news tab for press releases about the launch of this latter project from the end of 2006.

Subsidiary and affiliate companies are listed as Ahmed Janahi Architects, ReeMoon Consulting, Al Sawadi Investment and Tourism Company [via Ocean Developments], Ocean Developments, Rizon Jet. Marina West Real Estate Company.

According to the profile, AAJ Holdings is owned wholly by Ahmed Abu Baker Janahi and family.

The paid up capital is 250,000 Bahraini dinars.

Note a comment on the blog at http://muscatconfidential.blogspot.com/2007/12/blue-city-real-story-bahrain.html from a former employee of AAJ Holdings in South Africa who claimed that "there is a large legacy of bad debt left by [ ] Ahmed Janahi"

I wouldn't set too much store by a large firm being the auditor of accounts. Every firm has to have its accounts audited. There may not be many choices of auditor in Bahrain. Check the sponsors.

For information sake, see http://www.foxnews.com/story/0,2933,215981,00.html?sPage=fnc.entertainment/jackson dated September 2006, which announced that Michael Jackson was no longer working with AAJ Holdings.

Anonymous said...

Very intriguing. My sources tell me that its all smoke and fire as the court still goes on. No final decision was made, apparently it was a publicity game for the money. I guess when you are bankrupt you are desperate. It seems no one has to pay anything as even the bondguys want the show to go on without them. This is getting more interesting...Regards, Abdullah

Anonymous said...

Loads 'a Money. 'Nuff said.

"The wealth required by nature is limited and is easy to procure; but the wealth required by vain ideals extends to infinity."
— Epicurus, Principal Doctrines

"If you want to know what God thinks of money, just look at the people he gave it to."
— Dorothy Parker

Ahmed

ColOman said...

I hear he was in trouble before for similar things.... he as a bad rep in terms of being a businessman........... but he is good at design.... or something like that

Tim Noble said...

I know this is robably a bit of a random post but I wondered if any of you know how I could find a partner in the Gulf to help me sell my hunting and fishing knives and UK land?

Take a look at:

www.jamesnobleknives.com

www.ancientwoodland.com

I can also get development land in the UK

Any ideas?

Undercover Dragon said...

Muscati!

You've been tagged. The task:
# Pick up the nearest book.
# Open to page 123.
# Locate the fifth sentence.
# Post the next three sentences on your blog and in so doing...
# Tag five people, and acknowledge who tagged you.

Hope you can play! Come on, I bet you're reading something super interesting right now. And what harm can 1 post every few months do?

Dragon

Dragon

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