Part of 'restructuring' move after unpaid invoices lead to Dh20m shortfall
Concept sells rights to Fashion Week
The Dubai-based communications company Concept Group has suspended most of its operations and sold the rights to Dubai Fashion Week, citing unpaid invoices that have left it Dh20 million (US$5.4m) out of pocket. The move comes as part of a "restructuring" in which more than 40 workers have been laid off.
The group, which has various divisions in the advertising, publishing, events and public relations fields, said the suspension of a large part of its activities and staff cuts were necessary because some clients owed the company a total of Dh20m. In an e-mail, Aldrin Fernandes, the chairman of Concept Group, which was established in the UAE 30 years ago, denied the company was closing but confirmed it had suspended operations across several divisions to "focus our attention on collections and regroup". He said Concept Group had put on hold its advertising and PR operations but added that the company and its outdoor advertising divisions remained active.
"We have terminated 42 staff in total. We will have a total of 22 staff working in the group operations," he said. However, that was disputed by former staff members who claimed 65 people had lost their jobs. Concept Group said it had sold the operating rights to the Dubai Fashion Week, which it launched in 2007, to a Dubai-based company called Capital World Holding. Manoj Bhojwani, the chairman of Capital World Holding, confirmed it had bought the rights.
Concept Group said it was now looking to sell RetailME magazine, which is part of its publishing division, and to offload the associated RetailME awards. Mr Fernandes said Concept Group's problems were a direct result of difficult global financial conditions. He added that he hoped to compensate former staff members, many of whom claim they are owed salary payments or end-of-service gratuities. "We have tried to keep a positive outlook but things are bad and payments from some clients are not forthcoming," wrote Mr Fernandes. "We have already written to them [employees made redundant] and advised all that we will start clearing all within the next 30 to 60 days."
Mr Fernandes said debt collectors had been brought in to "handle the situation" and the disbursements. Last month, at least 15 former Concept employees - some of whom were made redundant several months ago - approached the labour dispute division at TECOM, which oversees Dubai Media City where some of Concept Group's operations are registered, seeking advice on how they could lodge formal complaints against the company.
Michael Panagiotakis, a former Concept Group employee, claimed he was still waiting to receive his final salary and gratuity. He said he took the matter to court after filing a complaint with TECOM. Mr Panagiotakis claimed a ruling was made about the amount of money he was owed by his former employers and added that he was awaiting payment. TECOM refused to comment on the details of the case but said: "TECOM has an established system to ensure that labour disputes involving its business partners [including Concept Group]are processed effectively. In the event of the dispute remaining unresolved between the parties, the matter will be referred to the local court as per procedure."
Mr Fernandes is abroad, splitting his time between Canada and India. He claimed in an internal e-mail, seen by The National, that three executives were responsible for liaising with staff in his absence. Two of those executives said they no longer worked for the company; the third could not be reached. email@example.com firstname.lastname@example.org