EXCLUSIVE: Police 'not involved' in Damas probe

Police are not investigating the circumstances surrounding the resignation of Damas International jewellery CEO and founder Tawhid Abdulla, a senior board member said on Tuesday.

“Of course not. Come on. This is the misinterpretation. He is still around, doing all his jobs. It is basically, to be short and brief, ignorance of the international laws, that’s all. The Nasdaq law, the DIFC law,” the board member, who asked not to be named, told Arabian Business.

Abdulla resigned on Monday following his admission that he had been responsible for unauthorised payments worth an estimated $165m.

“It hasn’t gone to his account, that’s for sure. It has gone to some investments. Some other investments. Investments that could bring revenues to the company itself. It is coming back, all the money is coming back in the next three or four months,” the board member said.

He added that the unauthorised payments were the result of ignorance of the code of conduct with which CEOs of listed companies must comply rather than criminal intent.

Damas shares slumped more than 13 percent on Tuesday, the biggest drop since June 7, to 32 cents.

“It (the company) hasn’t been public for a long time. We’ve just started being public for about a year and a half… It gets to the point where before you pick up the phone you have to do 1,2,3,4. When you say ‘hello’ to someone… it gets quite complicated.”

Contacted by Arabian Business, Tawhid Abdulla refused to comment. Separately, he was reported as telling Reuters: "I did not do it...The news about me making unauthorised transactions is not true," declining to give any details on why he had stepped down.

Mr Amjad, a lawyer representing him, said he had resigned because “he takes responsibilty for the unauthorised withdrawals.”

On Monday, 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.

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.

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, Nasdaq Dubai’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.

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