Mlimani City’s Botswana investor says Dubai property deal legitimate

14Jan 2022
By Guardian Reporter
Dar es Salaam
The Guardian
Mlimani City’s Botswana investor says Dubai property deal legitimate

TURNSTAR Holdings Limited, the Botswana based parent company of Mlimani City Holdings has said that it is taking legal action against its agent and real estate dealer in Dubai who are accused of an attempt to cheat on the 85 million pula Palazzo Venezia housing project.

One of the main entrances to Mlimani City Mall in Dar es Salaam.

In a statement to assure its investors who include Botswana Public Officers Pension Fund with an 11 percent stake and Debswana Pension Fund with 1.87 percent, Turnstar Holdings board of directors said in a statement last week that the purchased property is legitimate but that there are some legal issues surrounding it.

“As with all investments made by the company, the Turnstar board has had full knowledge of and oversight into the investment made by Turnstar relating to a Dubai property via Bucephalus Holding Limited,” the statement said.

The board of the Botswana Stock Exchange listed company which has also been accused of keeping off the Dubai investment on its books by media reports in Gaborone, explained that to the contrary, the Dubai investment was in fact approved by the Turnstar board on 9 December 2019, on an arms-length basis, and the agreement signed on 28 January 2020 was fully authorized.

“The relevant investment has been fully recorded and disclosed in Turnstar’s financial statements as an advance and Turnstar’s auditors have at all times been furnished with the necessary information,” the statement argued.

Explaining further about the mandate given to Turnstar Managing Director, Gulaam Abdoola, the board said, “The agreement between Turnstar and Abdoola signed on 8 June 2021 was entered into to grant to Abdoola agency and assumption rights, on an assigned basis, to institute, progress and enforce litigation proceedings in relation to the relevant investment in Dubai.”

Media reports in Botswana warned in December last year that thousands of pensioners and stockholders who have invested in Turnstar Holdings’ shares may lose tens of millions of Pula following the Botswana Stock Exchange listed company’s investment in a shady real estate deal in Dubai.

Botswana’s largest listed property company announced three years ago that it had extended its portfolio to the Middle East by acquiring a P85 million five-storey building at one of Dubai’s upcoming commercial areas. The 15.6 square metre Palazzo Venezia house has eight units, one shop and a double-parking basement.

Botswana’s Sunday Standard has turned up information that the whole deal was a scam and the property value was inflated by more than 50 percent. “While Turnstar Holdings in its 2021 annual report states the value of the Dubai property at P87 million, the actual value of the property is about P40 million. This means the property value in the annual report is overstated close to P50 million,” the investigative newspaper stated.

Sunday Standard investigations have turned up a valuation of the property by the Dubai Land Commission which shows that the property is currently valued at AED 12, 722925,38 which is about P40 million. The value of the property would actually be much lower, but was helped by the appreciation of the Dubai Dirham against the Botswana Pula between the time the property was bought and now.

In response to the allegations, Turnstar board said, “Notwithstanding the above, in the interests of good corporate governance and full transparency, the Turnstar Board has appointed a Gaborone law firm to conduct an independent legal forensic investigation into all aspects of the relevant investment and Turnstar’s investment in the Palazzo Venezia property in Dubai.”

“It is envisaged that the preliminary report in respect of the investigation will be presented to the Turnstar board by the end of January 2022 and the board will provide an update in that connection at the appropriate time,” the statement concluded.