Source: ArabianBusiness.com 12 October 2009
Photo: Damas website
The managing director and CEO of UAE jewellery retailer Damas International on Monday left the company after admitting to being responsible for unauthorised payments worth up to $165m, the company said in a statement.
Following Sunday’s voluntary suspension of trading by Damas on Nasdaq Dubai, the company announced that it has accepted Tawhid Abdulla’s resignation.
The luxury retailer said in a statement that he had stepped down "due to his disclosure to the Board of what is understood to be unauthorised transactions conducted by him".
The statement added that the full extent of the transactions had not yet been calculated but the company’s initial estimate was that they could amount to about $165m.
The Abdulla brothers, who are founding members and current owners of more than 50 percent of the company's shares, "fully stand behind the company", the statement said.
"They have agreed to commit the necessary assets to secure and repay in full any unauthorised transactions," the statement added.
A special committee of the Board is to appoint an independent global accountancy firm to conduct an independent review and an international law firm to assist in analysis of the transactions.
The Board has appointed Hisham Ashour as CEO of the company effective from Sunday. Tawfique Abdulla will continue to serve as chairman of the Board and has also assumed day-to-day responsibilities as managing director.
The company also said it had adequate funds to meet its current financial obligations and was continuing to conduct business as usual.
"The Board remains fully committed to the highest standards of corporate governance, and has implemented procedures to ensure that the repayment is conducted in an appropriate and timely manner and that all transactions are fully scrutinized in the future to prevent a recurrence," the statement added.
Damas, a family-owned jewellery group with origins going back to 1907, raised $270m in an initial public offering on the Dubai International Financial Exchange, NasdaqDubai’s predecessor, in July 2008, in one of the largest privatisations of a family-owned business in the Gulf.
One of Dubai’s best-known brand names and a leading member of the city’s jewellery and precious metals industry, Damas has more than 500 stores across the world.