In the first days of the new year in 2009, the Indian property tycoon Kabir Mulchandani saw his world turn upside-down.
The property market had suffered a collapse and the phone was ringing off the hook when two police officers arrived at the Dubai offices of his company, Dynasty Zarooni.
"Without warning, these officers arrested me and took me to Rafa police station," Mr Mulchandani says. "They were asking questions about fraud."
Bail was set but days later he was called in again for questioning after more cases began to surface. This time he was incarcerated for 140 days and released on bail only after the Dubai Land Department certified he had not broken property laws or sold non-existent property.
But the damage was done. Mr Mulchandani's name became synonymous with shady dealings in the turbo-charged days of Dubai's property boom and bust.
It would take another year and a half for him to clear his name. Last week, he won the final appeal of the cases against him and was exonerated of all criminal allegations.
Now Mr Mulchandani is set on rebuilding his business empire and boldly returning to the property sector. This time around, he sees a great opportunity to build something from the rubble by buying properties at a steep discount.
"It takes courage to step into a market like this," he says. "I haven't done business for two years … I have tried my best not to be bitter about these things, but there are moments."
Mr Mulchandani, 38, a Mumbai native with silver-specked black hair and a fondness for relaxing on his Azimut yacht, is not a stranger to crises. His business career began when his mother called him at his Stanford University dormitory room, asking him to abandon his studies and return home to save the family's ailing consumer electronics business.
He was just 20 years old and a year into an industrial engineering degree, but he dropped his textbooks and went home.
In the first few years, Mr Mulchandani tried to simply gain control over the company's debt and understand the business, but a chance encounter in a factory would lead for him to be known as "the ultimate price warrior" and an executive who would change the Indian electronics market for years to come.
Sitting in one of the factories in April 1996, he was approached by a man who asked to buy all of the television sets rejected from the assembly line for a discounted price. Usually, they would be thrown out so Mr Mulchandani happily obliged, but after a closer look he recognised there was a huge market for cheap colour TVs.
"People in India, especially at the time, were very conscious of the value they were getting for their money," he says. "A new colour television would cost between 15,000 [Dh1,216] and 20,000 rupees, and a new black-and-white television would cost much less. But what this guy showed me was that there was a huge demand for used colour televisions across India."
The thought came alongside the cable-TV revolution in India, where viewers' choice mushroomed from two state-owned channels to dozens of options. So Mr Mulchandani set up a scheme in which he would buy customers' old colour TVs when they came in to stores to upgrade to a new set.
He would then sell the used sets on to less well-off Indians, predominantly in rural areas. The system increased revenue at Baron International, his family's company, from US$5 million (Dh18.36m) a year to as much as $250m. It had market share of nearly a fifth of India.
But as more competitors sought entry into India, considered a growing strategic market, Mr Mulchandani decided to dispose of the family business.
He ran into some disputes with the Indian government over taxes but he has since resolved nearly all of those. It was during that time he made a visit to Dubai on the way to New York.
Flush with cash from the sales and his savings in 2004, Mr Mulchandani went in to see Nakheel's sales team about buying a villa on the Palm Jumeirah, which was selling for about Dh5m.
"They told me I had to decide today," he says. "I thought they were just pressuring me, so I went back to the hotel to let them wait. Then I found out they had sold it that same evening. That's when I decided I should stay and figure this market out."
To that point, Mr Mulchandani says he had never bought a single property. His first investment after setting up in Dubai in 2004 was a Dh30m building in Discovery Gardens. It was a test sale to get a sense for the type of buyers and their appetites, so he took his time selling apartments and personally negotiating with buyers.
It revealed two things about the Dubai property market, then in the warm-up phase of the outright boom times of 2007 and 2008: people would pay a higher final purchase price if they could pay over a longer period of time, and there was an undersupply of off-plan office buildings.
Dynasty Enterprises began to buy bigger buildings and place larger investments on the line. In 2007, Mr Mulchandani teamed up with Hilal al Zarooni, a Dubai developer, and renamed the company Dynasty Zarooni.
Between 2005 and 2008 the company acquired 32 buildings, as well as villa projects and other property investments that were disposed of at a value of more Dh24 billion.
The company also has investment properties across Dubai and Abu Dhabi, including 2,500 parking bays in Jumeirah Lake Towers and Business Bay.
Dynasty Zarooni evolved into an ultra-efficient distribution machine for the wildly speculative Dubai property market. It would buy entire off-plan buildings from developers for a bulk discount and re-sell floors and units to investors at a premium. Then it would help facilitate investors' resales by marketing those properties.
The company was the country's top buyer of newspaper advertising space in 2008, spending $14.6m and topping the likes of Nakheel and Emaar Properties, according to figures from the Pan Arab Research Center. Its advertising spending ranked 10th across the Middle East.
"The city was bursting at the seams in 2008," says Mr Mulchandani. "We expected people would continue to migrate here. We never had any idea that things would slow down before 2010 and 2011, when supply was expected to start coming on to the market in large numbers."
The true distinction of the company, as Mr Mulchandani sees it, was that it carefully managed its "value at risk". Sometimes buildings would be held on Dynasty Zarooni's books for just a single day before they transferred over to new investors, who were in essence smaller, less corporatised versions of Mr Mulchandani's company.
The next building would be acquired only when the previous one had been sold or nearly sold to investors. It was this same arrangement that would come back to haunt him.
When the property market began to teeter in September 2008, speculative investors across Dubai began to panic. Prices started falling and sales of off-plan - or unfinished - property seized up, leaving investors with millions of dirhams of instalment payments coming due and no way to sell. On December 30 2008, Mr Mulchandani deposited about Dh80m worth of cheques to the bank from investors who bought property from him.
Within one day, the same people who owed him money began lodging a mounting number of criminal complaints.
Their strategy, he says, was to file as many cases as possible to create the perception that he had committed a great fraud against investors. That way, the investors could force money out of him or avoid their obligations.
"The risk transferred to them when we sold them the properties," Mr Mulchandani says. "The system is there to protect but it got misused."
The investors made a number of allegations: that he had created an illegal investment scheme; that he had sold them non-existent properties; and that he misled them about the status of construction.
All were rejected by the courts, although there have also been several civil cases filed against Mr Mulchandani, some of which are not yet complete.
He is now pursuing legal action against those investors that filed "false claims" against him and is weighing his options for suing publications that printed what he calls "defamatory" statements against him, including the magazine Forbes, which described him in a headline on its website as "the Madoff of the Middle East".
"I don't blame the Dubai legal system," he says. "The most important thing for me now is to get the facts out there. I want to stay here. My son goes to school here. I'm happy here."
Mr Mulchandani is tight-lipped about future plans but he says property is still his preferred line of business in the Emirates.
"Dubai is looking cheap again," he says. "Around the world, investors are starting to see Dubai as relatively low-priced real estate. I think it's coming back."
