Saudi private equity firm Amwal Alkhaleej has announced it has settled its lawsuit against Damas Investments LLC and the Abdullah Brothers.
Amwal had claimed that the jewellery giant did not pay for shares it acquired before Damas went public two years ago, and the Saudi firm was seeking the return of its shares or a payment of $22m with interest.
However in a statement issued Wednesday, Amwal confirmed the claim “is now in the process of being dropped from the courts as a result of the parties having reached a satisfactory and amicable settlement”.
The legal suit was filed at the DIFC in March, and alleged the Abdullah Brothers agreed to buy 22,042,694 of Amwal shares at $1 a share in an agreement dated June 16, 2008, just two weeks before Damas was scheduled to make a public offering of 25 per cent of its stock.
Amwal claimed that the shares were transferred but the brothers failed to make the payment of $22m.
In November last year, the two sides agreed that the Abdullah Brothers would make a partial payment of $9.2m for 9,750 shares. While this agreement was signed by Ammar Alkhudairy, a board member of Damas and the chief executive of Amwal, no payments were forthcoming, according to the lawsuit.
“We are happy to have been able to resolve this matter through an out-of-court settlement that is very much in line with the initial compensation sought by Amwal AlKhaleej,” said Alkhudairy on Wednesday.
“Subject to the parties formally withdrawing the proceedings from the court, the settlement agreement will put an end to our legal dispute.”
In March Damas directors Tawfique, Tawhid and Tamjid Abdullah were banned by the Dubai Financial Services Authority (DFSA) from sitting on the board of any Dubai International Financial Centre (DIFC) company for ten years, and fined a total of $3m for withdrawing funds from Damas for personal use.
A month later, the company announced the three brothers had been appointed advisors to the board, and insisted that the appointments were “in line with the terms of the Enforceable Undertaking signed with the DFSA”.
In August Damas posted a full-year net loss of AED1.91bn ($523m), as it booked significant provisions it blamed on a “challenging 12 months”.
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