Dubai developer wanted in Germany over alleged hotel fraud


By Rebecca Bundhun

Authorities in Germany are seeking the arrest of a German national on suspicion of a multimillion-euro fraud in connection with a Dubai hotel project that was never built.

Georg Recker planned to let guests at his proposed four-star hotel in Dubailand use 1,000 Smart cars. Karim Sahib / AFP
Georg Recker planned to let guests at his proposed four-star hotel in Dubailand use 1,000 Smart cars. Karim Sahib / AFP

A court in Dortmund issued an arrest warrant in November for the developer Georg Recker, who is in Dubai and has denied any wrongdoing.

Investors are said to have provided about €25 million (Dh123.7m) for Mr Recker’s Dubai 1000 Hotel Fonds towards building a 1,050-room, four-star hotel in Dubailand.

The project was planned to be one of the largest hotels in the Middle East and was to have been completed by 2007.

Mr Recker’s property fund was set up in 2005 and was trying to raise €142m. In the prospectus provided to investors, Mr Recker requested a minimum investment of €10,000.

Five years after the project was launched, however, there is nothing but a hole in the ground at the site in Dubailand.

The prosecutor’s office in Dortmund, Germany, confirmed yesterday that a warrant had been issued for Mr Recker’s arrest.

Mr Recker denied there was an arrest warrant for him. He also claimed that work on the hotel project was continuing.

“Everything in Dubailand is delayed,” he said. “There is no infrastructure, no power, no electricity. What we are doing will definitely [continue], but it will take two to three years.”

About 70 of the 900 investors in the fund are also taking legal action against Mr Recker in Germany. KWAG, a law firm based in Hamburg, is representing the investors.

Mr Recker, 36, also denied the existence of the lawsuit.

Lutz Tiedemann, a lawyer at KWAG, asserted that five German bank accounts in Mr Recker’s name, containing a total of about €1m, had been frozen in connection with the claims. Mr Tiedemann added that it might prove difficult to arrest Mr Recker while he was still in Dubai.

“Enforcement in Dubai would be difficult. When he turns back to Europe he would probably be arrested.”

The construction consultancy Drees and Sommer International had been taken on to manage the hotel project, and Dewan Architects and Engineers was providing architectural consultancy services.

“We were working on this project a few years ago,” said Ammar al Assam, the executive director of Dewan. “The client … never paid us for the balance of our work.”

A spokeswoman for Drees and Sommer said her company was no longer involved in the project.

Maritim, the German hotel operator, was signed up to manage the completed property.

“Obviously Georg Recker was not able to win enough investors for the Dubai hotel project,” said Britt Winter, Maritim’s director of public relations. “As far as we are informed, the building is no longer being built, therefore the conclusion is very simple: Maritim cannot run a hotel that doesn’t exist.”

As part of the plans for the property, a Smart car would be provided free for guests who booked a room, according to the prospectus and a press release.

“Picture 1,000 ‘branded’ Smart cars driving around the city of Dubai and you will get a vision of the great brand-building and promotional opportunities within this exciting project,” the statement said.

Dubai’s biggest planned tourist attraction, Dubailand, was designed to help the city achieve its target of attracting 15 million visitors annually by 2015.

Dubailand, a project of the developer Tatweer, was launched in late 2003 with a billing as the Disney World of the Middle East, to be spread over 3 billion square feet.

The plans were that the development, with 45 major projects, would attract 40,000 visitors a day.

But the economic crisis and downturn in property prices has meant that many of the projects exist only on the drawing board.

These include the Universal Studios theme park, Lemnos, which was meant to be a “high luxury world dedicated to women”, and the Aqua Dunya water world, the centrepiece of which would be the world’s largest cruise ship, and the Great Dubai Wheel.

Mr Recker said he was now running a tour company and a German-language publication called Dubai Magazin.