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Damas CEO denies involvement in unauthorised transactions; shares resume trading
Source: BI-ME , Author: Bi-ME staff
Posted: Tue October 13, 2009 9:57 pm

UAE. The shares of Damas International, the Dubai-based international integrated jewellery and watch retailer, have resumed trading Tuesday following the resignation of its CEO on Monday on the disclosure of 'unauthorised transactions'.

Trading in the company’s stock on the NASDAQ Dubai market was suspended at the request of the company on Sunday, when the shares stood at 37 US cents.

“NASDAQ Dubai is in close contact with Damas following the company’s decision to voluntarily suspend its shares. The exchange holds its listed companies to high regulatory standards and will take any steps necessary to ensure that investors are kept informed and that its market continues to operate in an orderly manner,” the bourse said in a statement today.

The company's shares initially slumped 14%, the biggest drop since June 7, to 32 cents by 1.30pm in Dubai, but were down just 0.3% at 2.42pm.

"I expect that this negative news is not going to impact the shares of Damas that much because it's such a huge gold retailer in both India and the Middle East," a Dubai-based trader said.

Speaking to Reuters today, Tawhid Abdulla, the former Damas CEO, denied his involvement in any unauthorised transactions.

"I did not do it," Abdulla, who resigned on Monday, told Reuters in a phone interview. "The news about me making unauthorised transactions is not true," he added, declining to give any details on why he had stepped down.

Damas yesterday said the Abdulla brothers, who own more than 50% of Damas shares, had agreed to repay money involved in the transactions. It gave no more details, adding that the Company has adequate funds to meet its current financial obligations and is continuing to conduct business as usual.

A special committee of the Board is appointing an independent global accountancy firm to conduct an independent review and an international law firm to assist in analysis of the transactions.

Meanwhile, Arabian Business quoted an unidentified senior Damas board member as saying: " This is the misinterpretation. He [Tawhid Abdulla] 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".

Damas also said shareholders of its loss-making subsidiary DIT Group SpA decided to wind up the company incorporated in Italy. The move follows a meeting of DIT Group's shareholders on September 28, Damas said in a statement posted on the Nasdaq Dubai website.

The subsidiary designed, manufactured and distributed luxury jewellery including Stefan Hafner, IOSI, Porrati and Nouvelle Bague.

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MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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