x Abu Dhabi, UAESunday 21 January 2018

Damas hires PWC for internal audit

The Dubai company's announcement of the appointment follows the uncovering of unauthorised property deals.

Damas has hired the auditors PricewaterhouseCoopers (PWC) to investigate US$165 million (Dh606m) worth of what the jeweller described as unauthorised transactions by its former chief executive. The Dubai company's announcement of the appointment follows the uncovering of unauthorised property deals. Tawhid Abdullah resigned as the chief executive and managing director of Damas on Monday after disclosing the irregularities to the company's board of directors.

The company has announced the creation of a special committee consisting of the chairman Tawfique Abdullah, the brother of Tawhid, and two non-executive directors to fully investigate the transactions. "The appointment of PWC demonstrates the board's commitment to corporate governance and how seriously we take the disclosure from Tawhid to the Board, regarding these transactions," said Tawfique Abdullah in a statement.

"The focus now is on co-operating with PWC so they can report their findings to the regulators, bringing clarity and reassurance to all of our stakeholders through the independent audit." The committee is also in the process of finalising the appointment of an international law firm to oversee and advise the committee and board of directors on ongoing corporate governance, Damas said. PWC will report its findings in the coming weeks, which will then be presented to NASDAQ Dubai and the Dubai Financial Services Authority (DFSA), Damas said. A separate announcement about the transactions will be released to the market.

Damas said the Abdullah brothers, who own more than 50 per cent of Damas shares, had agreed to repay money involved in the transactions. "The Abdullah family is fully committed to repaying, in cash, all of the transactions, and we have more than enough assets to achieve this," said Tawfique Abdullah. Tawhid Abdullah has been replaced as chief executive by Hisham Ashour, who recently joined the company as its deputy chief executive.

Tawfique Abdullah said the business continued to perform well in the current economic climate and that the company had adequate funds to meet its current financial obligations. The transactions at the centre of the controversy involved investments with an unidentified property company, Gaetano Cavalieri, a Damas board member, said in an interview on Wednesday. Damas directors owed more than Dh259.5m to the company as of March 31 this year, according to its latest financial statements, an amount representing less than half of the transactions under review by the company.