Damas CEO quits over $165m 'unauthorised payments'

Source: ArabianBusiness.com 12 October 2009
Photo: Damas website
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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.

Sharjah police enforce law against men wearing accessories

Thirteen-year-old Mohammad was with a group of friends in Al Qasba area when he was reportedly approached by a police officer and taken to the police headquarters. His silver necklace had to go.
Another resident, Jeril Jaison Varghese, says he was in front of the Multiplex in Mega Mall to watch a movie when a CID officer asked him for his identification.
"I was taken to the Sharjah Police office inside the mall by a security guy from the mall. My silver bracelet was confiscated by the CID," he said.
When Varghese asked why his bracelet was being taken away, he says, police said men are not allowed to wear bracelets or any fashion accessories in Sharjah malls even if it is silver and not gold.
"When did this rule come into being? There was no public notification and no posters in the mall notifying people of this rule," Varghese said. Another resident said on Saturday CID confiscated his friend's silver bracelet while they were in a mall.
"Is there a rule in Sharjah that authorises the CID to confiscate fashion accessories other than gold from residents and their children from malls?" asked Aji Alexander.
A Mexican mother who recently shifted to the UAE and is now living in Sharjah said her 14-year-old son was scared when he was stopped by police who shouted at him for wearing diamond earrings.
"Police were rude... We have no clue that such things are not allowed here," the mother said. "I am not allowing my son to go to Al Qasba again. My son is a very decent and polite boy," she said.
"If people are not offending the laws of the country and are not acting like women by wearing such accessories so why are police taking such action?" she asked.
Mohammad from Sudan said his 18-year old nephew who came from Abu Dhabi to visit his grandmother in Sharjah was taken last week to the headquarters for wearing a silver necklace.
"The boy was afraid. He was standing in front of his grandmother's house when police took him to the CID. After three hours he contacted us," said Mohammad. Residents said Sharjah authorities should inform people who wish to come here that men must not wear fashion accessories.
"Tourist companies should inform the public. Information booklets should be handed to people at the country's entry points. They should advertise that in all malls and entertainment areas such as Al Qasba which we believe are safe places for our children to spend time," said a resident.
"We are aware of the decency law in Sharjah, but wearing silver bracelets, necklaces, or even earrings in a decent way is not against the law," said a resident.
A senior CID official told Gulf News that police are implementing an eight-year-old decency law.
"Men are not allowed to wear such accessories. Everybody is aware of that," he said. "We are informing people through the media and people should be aware of that," he said.
Islam forbids men from wearing gold and silk.
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Source: Gulf News 21 July 21 09