RAK government to ring-fence Massaad investments

The UAE emirate of Ras Al Khaimah is ring-fencing troubled overseas investment worth hundreds of millions of dollars as it seeks the extradition of former RAK Investment Authority CEO Khater Massaad.

The dual Swiss-Lebanese national was arrested at Jeddah Airport last month under an arrest warrant issued by the RAK government relating to an alleged $1.5bn fraud.

Read: Former RAKIA CEO held in Jeddah airport over alleged $1.5bn fraud

The National reports that RAK is transferring purchases overseen by Massaad into a new company it intends to wind up as early as June next year.

The government is hoping to recoup as much as 50 per cent of the portfolio in dollar terms before litigation and settlement, according to the publication.

“The principal reason for the establishment of RAK Development was to ring-fence the troubled assets and bring focussed management and expertise to address the complexities associated with distressed assets,” it quoted Jamie Buchanan, a spokesman for the RAK Government, as saying.

The troubled assets being transferred under the unit include the Sheraton Tbilisi hotel in Georgia and a massive infrastructure project in the Indian state of Andhra Pradesh.

Some of the assets are also expected to be the subject of planned litigation overseas by the emirate, which has already accumulated legal fees in the millions of dollars to pursue cases against Massaad.

It is hoped the consolidation of the troubled assets under one company will make it easier for the emirate to tap international debt markets if required in the future.

Massaad, who was credited with developing RAK Ceramics into a global powerhouse before taking on the RAKIA role in 2007, is being held by Saudi authorities and denies all charges against him.

He has already been tried and convicted of corruption and fraud in the UAE in his absence after leaving the country in 2012.

Read: Former RAKIA CEO ends negotiations over alleged $1.5bn fraud

Last week, Massaad issued a statement through a Saudi legal firm claiming his innocence and arguing he was never served summons or allowed to defend himself for the two criminal judgements against him dating from 2015.

RAK denied these claims and said government representatives had met with him on “numerous occasions”, according to The National.