A UAE based real estate company, DAMAC Properties, in league with its local partner Setsquare Associates, is offering luxury flats in Dubai for Bangladeshis, dodging the foreign exchange regulations of the country.
The companies do not have any authorisation to do this kind of business, as Bangladesh Bank told the Dhaka Tribune yesterday and later in a press release.
In an advertisement saying “Dubai is Back” published in two dailies, the company said luxury hotel flats can be bought in Dubai’s Golf Course area for Tk12.5m and in Burj area for Tk40.5m on easy payment.
According to the ad, the company was holding a booking event for interested clients yesterday and today at the Westin Hotel.
Dhaka Tribune correspondent, who went yesterday to the Westin Hotel, found three men in the Silver Room of the hotel pitching the Dubai flats to some 5-6 prospective buyers.
One Shiv Kant Shiva, who identified himself as a property consultant from India, described the procedure of the booking by showing pictures of the luxury flats.
He said for buying a flat at the Golf Course or Burj in Dubai, the clients would need to pay by 2015 in instalments.
Asked how they might sell a flat for anybody with black money, Sayed Qayyum, executive director of Setsquare Associates, said, “It’s not a problem. Everything will be arranged by Masud Chowdhury.”
Masud Chowdhury is the chief executive officer of Setsquare Associates, who was not present at the event.
Qayyum indicated that all payments would be “handled” by his company.
Asked about the relationship between DAMAC Properties and Setsquare Associates, Qayyum said, “We are the local partners of the company.”
Bangladesh Bank Executive Director M Ahsanullah told the Dhaka Tribune that the existing regulations do not allow such dealings. “It is a clear violation of foreign exchange regulation.”
Later in the evening, a press release was issued by the central bank, saying a lucrative advertisement about purchasing flats in the UAE had come to the bank’s notice.
“The transfer of money from Bangladesh for resident Bangladeshis purchasing immovable property abroad is subject to restrictions under the Foreign Exchange Regulation Act, 1947. Collaborating in illegal transfer of money is a punishable offence,” the release said.
Bangladesh Bank also advised the media to be more cautious in running such advertisements.
According to Foreign Exchange Regulation Act, 1947, no person other than an authorised dealer shall in Bangladesh and no person resident in Bangladesh, other than an authorised dealer outside Bangladesh, buy or borrow from, or sell or lend to, or exchange with, any person not being an authorised dealer or foreign exchange.
An official of the Office of the Registrar of Joint Stock Companies and Firms (RJSC) said the office had no information about the DAMAC.
The RJSC is the sole authority which facilitates formation of private, public, foreign companies, trade organisations, societies and partnership firms.
According to its website, DAMAC Properties was established in 2002, as a private residential, leisure and commercial developer in Dubai and the Middle East and in the last decade has expanded to North Africa, Jordan, Lebanon, Qatar and Saudi Arabia.
A business consultant seeking anonymity said in the past, capital flight from Bangladesh had occurred through the “Malaysia My Second Home Programme” regulated by the Malaysian government for foreigners to live in Malaysia under a 10-year renewable multiple entry visa.
The consultant said businesses such as Setsquare Associates were creating the opportunity for money laundering through illegal channels like hundis.
