"In his native India, Probir Chatterjee is a little-known figure. Yet, over the coming days, more than 250 Irish people will file into the Carlton Hotel at Dublin Airport to hear the accountant speak.
The reason? Chatterjee’s firm, Smart Investments, is attempting to kick-start a number of stalled property developments in Dubai.
His audience will be made up of Irish investors who put down deposits for three schemes in Dubai’s Sports City complex - Bermuda Views, Eagle Heights and Profile Residence.
Chatterjee is likely to have an attentive audience as he outlines a plan to take over the delayed developments and complete them, giving certainty to the investors at last.
Through an Irish-based selling agent called Larionovo, hundreds of Irish people invested money in apartments and villas in the three developments.
Enticed by glossy brochures and talk of a guaranteed return, many put their life savings into the property projects. Others stepped up to buy multiple properties, paying out hundreds of thousands of euro upfront.
In late 2008, Larionovo collapsed into liquidation. The Dubai developments, which were being spearheaded by a local firm, stalled. Since then, the investors have struggled to get any information about the development or the whereabouts of their funds.
For all concerned, the Dubai investment dream has turned into a nightmare.
‘‘A few years ago, I asked Larionovo about the progress of the development," said Tony Hynes, a Dublin businessman who invested in one of the schemes.
‘‘I was shown a picture of a six-storey building that was almost complete. A few months ago, I went out there myself.
All I could find was a hole in the ground. I don’t know what building they showed me, but it certainly was not mine."
Hynes is the chairman of an action group set up last year to investigate the Dubai debacle and try to recover funds from the project. It has discovered a maze of companies, with intricate shareholdings and impenetrable operations.
‘‘Look, I accept there is a risk associated with any investment, but we were given lots of promises that turned out to be lies," said Hynes. ‘‘We were told it was backed by the Dubai government.
Not true. We were told our money was in a safe account and was not being touched. Not true. It was actually being used to fund the development."
Hynes has already given up hope of getting his money back from Dubai.
He said the best option was finding a partner like Chatterjee to finish the development.
‘‘I am not getting my money back, so I am trying to get the keys instead," he said. ‘‘Next week’s meetings are crucial. Hopefully, in two years, it will all be over and I will be in possession of the apartments. Hopefully."
If a deal with Smart Investments can be agreed, Hynes and his action group could yet salvage something. Others might not be so lucky.
During the years of economic boom, Irish people were among the biggest buyers of foreign property in the world.
The numbers vary, but industry estimates put the number of Irish-owned foreign properties at somewhere between 150,000 and 250,000.
They ranged from condominiums in Chicago to villas in Cape Verde, from Bulgarian flats to penthouses in Poland. Geography was no restriction - properties were purchased in places as diverse as Dubai, Morocco, Hungary, Turkey, India, France, Italy and Portugal.
But as the economic climate has changed, a series of overseas property ventures have come undone. Some developments, like those in Dubai, have failed to materialise. Others have plummeted in value, leaving thousands of investors nursing big losses.
A murky world - that’s how lawyer Tom McGrath described the overseas property business. During the boom years, he provided legal advice for people buying abroad.
Now the market has soured, he is spending much of his time helping clients pick up the pieces.
‘‘People bought into the market, they bought into the flash property shows, the fancy talks, the gushing newspaper articles," said McGrath, a partner with McGrath O’Donnell & Associates in Dublin. ‘‘But at the bottom of it all, there was simply no regulation.
‘‘People were doing things they would never dream of doing if they were investing in Ireland. I know one person who bought an apartment in Bulgaria from the back of a fruit van.
People ran away with themselves," he said.
In the case of Kuvera Ireland, around 250 Irish investors bought into the sales pitch. The company took over a hotel in Dublin 4 on September 15, 2007, to launch plans for two luxury developments in India called Mountain View and Orchard View.
Kieran Murphy, the man behind Kuvera Ireland, spent the day meeting potential customers and introducing them to Dr Ajit Jha, the boss of Kuvera India and his partner on the ground.
The show and the figures must have been impressive -Kuvera raised €8.9million for the apartment scheme in Rudrapur, a special economic zone in north India.
Kuvera Ireland brokered the deal and investors were told that contracts for the building work existed between the investors and a construction company called VG Buildtech.
Between them, Mountain View and Orchard View were to comprise 580 apartments. As of last week, the site consisted of a boundary wall with some small preparatory works. Nothing had been built.
‘‘Two weeks into the project, Kuvera knew there was a problem." said John Plaice, who invested in the scheme and now chairs an action group set up to recover money from Kuvera. ‘‘The problem was very simple. Foreigners could not buy properties there, but they tried to work around it with leaseholds and so on. There were literally problems from day one."
The fall-out from Kuvera ended up in the High Court in Dublin, where an order was obtained freezing Murphy’s assets.
A settlement was eventually reached between Murphy and the investors, under which he agreed to hand over assets.
Under the settlement, the investors were to take possession of properties at a golf resort in South Africa, five British properties and €143,00 0 from a South African bank account.
Murphy’s shares in Kuvera India and equity in VG Buildtech were also to be ceded.
Almost a year on, the transfers of the various assets are close to completion.
However, the Kuvera case shed startling light on how some property deals were structured.
Under the so-called ‘Kuvera reward programme’, investors were promised flights and holidays at five-star hotels if they convinced others to invest in the company’s Indian developments.
‘‘The deal was a good one if it had worked," said Plaice. ‘‘But it did not work, and we are still getting to the bottom of what happened, and why it happened.
Money that should have been in an escrow account was used on sales and marketing.
The whole scheme was based on getting more people involved. The market slowed and no new investors were found. The whole thing became exposed. There was a huge element of trust in the investment.
We were badly let down."
Anthony Joyce, a Dublin solicitor, represented the Kuvera action group and has since spent a lot of his time dealing with disgruntled investors in other property ventures.
‘‘If there is a fraud or a perceived wrongdoing, we can take a legal course of action," according to Joyce. ‘‘But in lots of cases, I simply can’t help people.
The scheme is legitimate, but individuals can’t afford to make the payments. ‘‘But there is a difference.
At least you get the keys if you keep on paying. But there are a lot of cases where you pay your money and you might end up with nothing."
Two weeks ago, Joyce was retained by Irish investors concerned about construction delays at the Kensington Royale development in Dubai Sports City.
The five-star, 18-storey development of 252 units is being developed by Middle East Development in the United Arab Emirates, and was originally due to be completed early last year.
Joyce is also acting for investors who put money into a proposed €100million resort in Cape Verde.
Flash Developments, which is headed by Dublin developer Ciaran Maguire, received deposits from more than 200 Irish and British investors for apartments and villas in the planned Palm View Resort.
Following a 16-month delay in the project getting full planning permission, a number of the investors put together an action group to try to recover their money.
Ten days ago, the investors were stunned when KPMG was appointed as liquidator over Flash.
Maguire said that the development was going ahead, stating that all the ‘‘contracts, development lands and credit lines’’ had been transferred to another company called the Ciaran Maguire Group.
Maguire said that Flash Developments was ‘‘simply a sales and marketing company’’, and its liquidation would not have any effect on the development.
KPMG has initiated a full investigation. ‘‘I have absolute sympathy with a lot of investors," said Joyce.
‘‘They got caught up in genuine investments that went wrong. Many schemes were plausible on paper. They checked out. But they were undone by the market."
Often, the court is the place of last resort.
In recent days, 39 investors launched proceedings against Simple Overseas Properties, an Irish property firm, in relation to deposits which were taken for properties in developments in Morocco and Spain. That case, and others like it, highlighted a major problem, according to experts - a stark lack of regulation.
‘‘Some of it is real Wild West stuff," said Paul McCann, head of specialist advisory services with accountancy firm Grant Thornton.
‘‘There is an assumption that Irish overseas property firms are regulated. Even travel agents are bonded. But it is not the case.
‘‘I think it is now incumbent on the government to introduce regulation, or force companies to be bonded.
Alternatively, the various representative bodies need to start enforcing strict guidelines.
Deposits should not be allowed to be used by developers as cash flow."
The government is understood to be looking at the system, in an effort to introduce some new checks and balances.
But for people like John Plaice, Tony Hynes and the thousands who have seen their investments evaporate, it could well be too late."
