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Tue 23 Mar 2010 09:36 AM

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Saudi firm sues Damas Brothers for $22m

KSA private equity firm suing embattled former bosses of jewellery giant for $22m.

A Saudi private equity company has launched a $22m legal action against the three Abdullah Brothers who ran jewellery giant Damas.

On Sunday Tawfique, Tawhid and Tamjid Abdullah were banned by the Dubai Financial Services Authority 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.

Now UAE daily The National has reported that Amwal AlKhaleej, a Riyadh-based private equity house, claims the jewellery giant did not pay for shares it acquired before Damas went public two years ago.

The $22m legal suit, which has been filed at the DIFC, alleges 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 claims 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 al Khudairy, a board member of Damas and the chief executive of Amwal, no payments were forthcoming, according to the report.

Amwal is now seeking the return of its shares or a payment of $22m with interest. A hearing by the DIFC is due to take place on April 12.

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