The managers of Qatar-based structural steel contractor Panceltica have fled the country over fears they face jail as a legal wrangle with local developer Barwa escalates

It is understood that chief executive David Ball and several key managers decamped to Dubai last month and are consulting lawyers about their next move.

The row relates to a $343m (£210m) 2,000-unit residential scheme built for Barwa in Doha, the Qatari capital. The job remains unfinished after a dispute surfaced last December between Barwa and Panceltica over issues such as contract variations, the settlement of subcontractor deals and potential damages due to delays.

According to a source close to Panceltica, Ball moved to Dubai after being told that under Qatari law he faced prison or having his exit permit withdrawn if the firm wrote cheques that bounced.

The source said: “Panceltica is not getting paid because of the dispute, a situation made worse because Barwa is its only client.”

Panceltica declined to comment.

Panceltica is not getting paid because of the dispute – Barwa is its only client

Source close to Panceltica

Barwa is also an investor in Panceltica, which is listed on the alternative investment market (AIM). In January, Barwa upped its stake from 14% to 20% by way of compensation for the delayed scheme, and last month

it emerged Panceltica was considering allowing the developer to take over the whole of its Qatari operation.

In a fresh twist, a second boardroom row broke out on Tuesday when 26% shareholder Strategic Partner, which is backed by Dubai-based private equity firm Ithmar Capital, called for the non-executive directors to be removed and the firm to be de-listed. Its motives are unclear.

The company, whose turnover was forecast to be £152m in 2008 before the row, floated on the AIM in March last year with a market cap of £236.4m, which has since shrunk to £5.32m.

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