Damas, the region's largest gold and jewellery retailer, has appointed an interim chief executive in the latest step of a restructuring after the discovery of US$165 million (Dh606m) in unauthorised transactions. The changes come three months after Tawhid Abdullah, a member of the company's founding family, resigned as the managing director and chief executive after disclosing the company's unapproved deals.
The deals almost pushed the company out of business. Damas is soon expected to sign a debt standstill while it undergoes a restructuring with asset sales. Sanjay Kalsi, the chief financial officer, has been chosen as the interim chief executive. Sanjay Macchanda, a partner at PricewaterhouseCoopers who is advising Damas on the restructuring, has been appointed the chief restructuring adviser. "We welcome these gentlemen and the expertise they bring to the senior management team of Damas," Tawfique Abdullah, the chairman and one of the shareholders of the company, said in a statement on the NASDAQ Dubai website. "I am pleased to report that the company continues to trade well and is generating cash from its operations."
The former chief executive, Hisham Ashour, had come to Damas under an interim contract to work through a transition period and had left to "pursue other interests", the company said. Damas has also appointed the deputy chief financial officer, Dinish Dhanak, as the interim acting chief financial officer and Namir el Aridi as the general counsel and company secretary. Last October, Tawhid Abdullah stepped down after disclosing the company had made the transactions, which involved at least 50 deals, mainly in property.
They included investments in the Angsana Hotel and Suites, twin 49-storey towers on Sheikh Zayed Road in Dubai, an informed source said. Damas has since sold one of the twin towers. Tawhid and his brothers, Tawfique and Tamjid, have signed an agreement to repay the full amount of the deals, estimated at $165m. While Damas's core retail business was profitable, with a gross income of Dh320m in the six months to September last year, it reported a loss of Dh714.9m due to underperforming loans.
Mala Pancholia, a senior analyst at Al Mal Capital in Dubai, said the changes were a positive step and would renew investor confidence. @Email:email@example.com