In just a matter of months, the future of the company had changed completely. In February 2008, MiNC’s office in The City had reached capacity and we were looking for a larger space, but by November, we had to make the majority of the team redundant and explore options to close the business.
Similar to most other participants in any investment field, this dramatic change in the marketplace couldn’t have been foreseen. The credit crunch in the US, and the demise of Northern Rock and Leman Brothers all had a large impact on the UK economy.
We waited as long as we could before announcing redundancies and personally took big paycuts, hoping that our investments in Dubai would be enough to support the MiNC group as a whole. But when news broke in Dubai about a drastic reduction in visitor numbers at the 2008 CityScape Property Exhibition, the value of our investments plummeted by around 50%, literally overnight.
Worse was to follow when our general manager was imprisoned as a result of a dispute with a landlord. The dispute surrounded a serviced apartment project where completion was delayed, and the landlord wilfully banked post-dated cheques that were made at the beginning of the project when an earlier completion date was assumed. Because of the delay in completion, there was not the cashflow in the project to honour one of these cheques.
The penalties for this in Dubai are extremely severe, as we found to our immense cost. We managed to get our manager out of jail by emptying all of our savings and working capital, but fearing more reprisals from the local authorities, both he and Haroon left the country.
The next challenge was how to manage the operation on the ground in Dubai. I was managing a serious situation in London at the time, but I wanted to try everything I could to stabilise matters in Dubai as well. This meant I had to spend at least a week of every month in Dubai, but even despite this, it simply wasn’t possible to turn things around.
In early 2010, the tough decision was made to disband all MiNC offices, and sell all the assets within our serviced apartments operations.