Monday, 22 March 2010

The DFSA shows its teeth

The Dubai Financial Services Authority has shown that it has teeth, imposing fines and banning the Abdullah brothers from acting on the board of any DIFC company for 10 years.  A regulator doing its job is a good sign for business in the UAE.  However, as there are two parallel systems here the brothers could set up outside the DIFC at some time in the future.  The National newspaper reports that Tawhid Abdullah, the former Damas chief executive, “borrowed” almost two tonnes of gold from the company’s vaults. The gold, which has not yet been returned, was used to make “certain personal investments”.
Source: 21 March 2010
Photo: Sanabisdailyphoto

The Dubai Financial Services Authority has banned the Abdullah Brothers from the board of any DIFC company for 10 years and fined them a total of $3m after they were found to have withdrawn Damas funds for their own personal use without disclosing it to the board.
“The sanctions include financial penalties against Damas, Tawhid, Tawfique and Tamjid Abdullah, and voluntary bans, for periods up to 10 years, on the Abdullah Brothers from acting as directors of Damas or any company in the Dubai International Financial Centre,” the regulator said in an emailed statement.
Criticising the brothers for their "failure to exercise appropriate corporate governance over the company", it said they owed "approximately AED365 million ($99.4m) plus the value of approximately 1,940,250 grammes of gold" to Damas. The firm was also fined a total of $700,000.
The DFSA added that the Abdullah brothers have agreed to repay the money owed to Damas. The brothers are reported to be considering selling personal assets to raise funds, including the sale of their yacht.
The discovery of the “unauthorised transactions” led to the departure of the firm's chief executive officer, Tawhid Abdullah, last year.  When Damas listed on the Dubai International Financial Exchange, now known as NASDAQ Dubai, in July 2008, he told Arabian Business that he was looking forward to increased opportunities as a result of the move.
"It's like gaining a PhD in something - you expect you will have more responsibilities but then you also have more opportunities," he said.
"Transparency is an element that we have lived and believed in, and it is positive. The world is becoming global and so I don't believe in the mentality of not being transparent - the more transparency, the easier it is to expand fast."
Tawfique Abdullah has served as chairman of the board of the company since 1980 and is responsible for monitoring group strategies and mentoring the executive committee.
He is also a qualified gemologist and goldsmith, and currently holds professional and active memberships with various organisations such as the Dubai Gold & Jewellery Group, the World Diamond Council and the World Federation of Jewellery.
Tawfique has also served as CEO of the Dubai Metals and Commodities Centre and has been bestowed with the title of ‘Knighthood of Belgium'.
Tawhid Abdullah served as CEO of Damas from 1990 until 2009. He also served as managing director of the company for over 10 years and was responsible for finance and corporate functions as well as marketing and the gold wholesale business.
Abdullah, who was instrumental in expanding the company's retail network and enhancing the Damas brand for over a quarter of a century, is also a qualified gemologist. He has held various senior positions at jewellery companies, including managing director of Dubai Gold & Jewellery Group.
Tamjid Abdullah has served as director of Damas International since 2005. He has also served as deputy managing director of the company for over 10 years and is responsible for the diamond division as well as the retail network.
He has been instrumental in establishing the quality control and customer service departments of Damas Jewellery, and has been recognised with numerous awards for jewellery design and craftsmanship including the De Beers Millennium Award for the Best Jewellery Piece in 2000 and in 2004.

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