Dubai's DMCC tightens gold sourcing supervision after scandal

  • Share via facebook
  • Tweet this
  • Bookmark and Share
Ahmed Bin Sulayem, executive chairman of the DMCC

Ahmed Bin Sulayem, executive chairman of the DMCC

Dubai's gold trading centre said it would tighten supervision of how the metal is sourced after reports in the British media alleging it ignored international guidelines designed to prevent human rights abuses and underground trade by African warlords.

In February, Britain's Guardian newspaper and the BBC said the Dubai-based Kaloti Group, a major gold refiner and jeweller, had failed to examine suspicious deals, accepting for example 2.4 tonnes of gold from customers who provided no paperwork.

The reports also alleged the Dubai Multi Commodities Centre (DMCC), which hosts the emirate's gold market, had failed to enforce guidelines against such deals. Both Kaloti and the DMCC denied the reports and said they acted properly.

The DMCC's chief executive Gautam Sashittal told a conference on Sunday the centre would commission an expert advisory firm to conduct a further comparative study of various sourcing protocols and "review the robustness of our process".

"We want to look the entire reporting and audit process and confirm we are in line with what others are doing," he said.

"Number two, the DMCC will create an independent body that will further strengthen the independence and integrity of the review process."

The body will be appointed later this year and include a large proportion of local industry figures, as well as some international experts, Sashittal said.

On the exact role of the body, "it is very early to say that but it could be as narrow as advising us on the outcome of audits, or as wide as encompassing more of what we do with the delivery of certification."

Sashittal repeated the DMCC had done nothing improper.

"Nothing was wrong and we stand by everything we did." But he added: "Having said that, because there have been allegations made which are in our view unfounded, we wanted to take that extra step."

In the past decade, Dubai has become one of the world's major gold trading centres.

Ahmed Bin Sulayem, executive chairman of the DMCC, said on Sunday that in 2013, almost 40 percent of the world's physical gold trade came through Dubai, while the value of gold traded via Dubai annually climbed to $75bn from $6bn in 2003.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Sandy Johnson

DMCC is always at the forefront of making sure all things are conducted with due diligence. With the volume of gold transiting through Dubai, its always a challenge to make sure everything is done properly, but if there is any entity that can do it, DMCC will surely be it.

I incorporate companies for this jurisdiction on a daily basis, I know first hand how stringent their regulatory process is. My firm is a DMCC regulated company

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Petroleum producers shift attention from Middle East: Kemp

Petroleum producers shift attention from Middle East: Kemp

Following four decades of war, sanctions, nationalisation and...

Gold industry shifts east as Dubai plans huge refinery

Gold industry shifts east as Dubai plans huge refinery

$60m refinery being built by Kaloti Precious Metals in Dubai...

Dubai gold dealers shun Turkish bars on fear of links to Iran

Dubai gold dealers shun Turkish bars on fear of links to Iran

Trade in Turkish gold bars to Iran via Dubai is drying up as...

Most Discussed
  • 17
    Nakheel PR: The toughest job in Dubai?

    You forgot to mention the sewage pit between JLT and Jumeirah Park and the terrible landscaping in Jumeirah Park The chain link fencing they want to install... more

    Monday, 30 March 2015 9:05 AM - An Emaar Fan
  • 14
    Dubai Int'l T1 is too congested, says Indian airline boss

    Question: All you people, criticizing my comment, do you work for Air India by any chance?

    Additionally, for all the whiners, I will provide you... more

    Tuesday, 31 March 2015 12:50 PM - Mosa
  • 9
    Post traumatic stress?

    I once had a Emirates Post employee hang up on me when I asked her to repeat something. That said, the worst is my management company, Kingfield Management... more

    Sunday, 29 March 2015 6:07 PM - Sarah