Global recession has already reduced the foreign investment, coming into Dubai real estate sector to bare minimum, and now the news of frauds and scams are there, to further frighten off the investors. These days, Dubai is in the news for all the wrong reasons (the most recent being the “standstill” request being made by Dubai World, which literally shook the world’s economy before Abu Dhabi came to rescue). There’s no doubt that Dubai government is doing its best to control the damage, taking steps like tightening up on fraud companies and professionals, introducing new laws, and seeking financial help from Abu Dhabi. However, the setbacks like recession, credit crunch and frauds keep coming out in succession, very much like the opening of Pandora’s Box, making it really difficult for Dubai to regain its charisma. Sorting out all of these problems, one by one, is not an easy task, but this is something that must be done. Dubai cannot afford to loose its credibility at this critical juncture.

Dynasty Zarooni was one of the first well known real estate company to appear in the news along with fraud allegations. The chairman, who at first denied the allegations (not surprisingly), ended up being held later on accusations of “fraud and embezzlement”. The lawsuits filed against the firm involved more than a whopping AED 6 billion. Then came the news, of some top officials at Nakheel, being investigated for bribery charges. Even though, you can’t blame Nakheel for the wrongdoing of its executives, the name associated with the accused ones was enough to scare investors. A fairly recent scam to surface is the one that involves Al Fajer Properties.

Charges are laid against many individuals, lots of arrests are being made, however that’ll not be enough to satisfy the investors. One thing that continues to woe the investors is the notion of brushing local’s involvement in some of these frauds, under the carpet, which makes the experts question the credibility of all these probes and sentences taking place. Dubai government needs to act fast because nothing intimidates investors more than the risk of fraud.