By Andrew White
UAE jewellery bosses banned from the board for 10 years and fined $3m.
The DubaiFinancial 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Brothers from the board of any DIFC company for 10 years and fined them a total of $3m after they were found to have withdrawn Damas funds for their own personal use without disclosing it to the board.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 .
"It was the Abdullah Brothers' practice to use the bank account(s) of Damas as a cash reserve from which drawings were made for their personal use and for the use of the Abdullah Brothers' Companies," it added.
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."
BROTHERS IN BLING: The family at the heart of the Damas retail empire
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.
Damas was established for more than 45 years, and has been the back bone of the gold industry in Dubai, United Arab Emirates and the Middle East. Damas even was able to place Dubai internationally in the Jewelry and Gold trade. Damas is not the only group who may have done something outside the lines, there are many who have done worse, but yet a cover up was managed. I think this has to be placed into consideration, and perhaps slap the board of directors with a warning, and not exposes their name as itâ€™s has been done now. Please remember what Damas has done to assist the economy, how long they have been trading, and the years they put up with the hardship of the business trade in Dubai. People cut them some slake will ya.
After years of being beset by management and credibility problems, this ruling finally gives the regulator some teeth, and will serve as a warning to other family shops that list yet still think minority shareholders are to be ignored. The media must pursue this story and make sure that the restitution is made, and that any further penalties are reported.
I hope no one listens to Kayed... this kind of backwards thinking is the problem with transparency. You don't want to mention the names of people who scammed their shareholders? You obviously either don't understand what happened or you have done something your self and are feeling a little guilty. I think they should line the streets with their pictures so that everyone understands that public companies who run on the publics money are PUBLIC. And that using investor money to buy yachts is disgraceful. Everyone who works here from the construction worker to the CEO, help build the economy. They are not special...
And if I bounce a cheque for a few hundred dirhams, the police will take me to jail and keep me there until the cheque is honoured! Gives a whole new meaning to "One law for the rich - and one for the poor".
I agree with Kayed Leave them alone to rectify any problems that they may have. They have themselves made a huge success worldwide of the company and employed many people and they have put the jewellery industry of Dubai in the map. They know what they do. They are grown businessmen. ighly successful for that matter. Stop all tis judging nonsense. I understand that it is now public, but leave them to fix what went wrong. I think people here lack support when the poop hits the fan, people are only good when things are good....what about in bad times??? Let's wish them the best in solving this, which must be very difficult times for them now, and make it a bigger success in the near future! In the recession we have all lot. There are no winners - they have lost too.. Must not be easy. All the best Brothers!
Kayed , BIBI what you have said is righ and actually Damas as a company and an organization is older than a 100 years not 45 by the way , for others who commented negatively george,jessy, and john . these people you are talking about i do not think you have any clue about ,because if you did you would never say that and every one knows that 90% of what has been written in the news paper is "bzar" not true.These people more than any one else have served their country and city more than any other jewelery company owners and one of the top 5 business men that did in dubai ,still under these surcumstances they are still helping. this company was owned actually by family members more than 90 years,wealthy before they eaven got to work in damas. always individuals that are succesfull in there own way that have there own business have up's and downs
plese make sure of what you have said is true before commenting , because you are talking about great men , and not all what has been said is true and By the way the yachts were owned since 1990 or maybe before that when it was still there own company.