Damas International, the Dubai-based jeweller, is to engage what it calls a cash-recovery "task force" in a bid to recoup more than Dh337 million it is owed by creditors.
"Several agreements" have been signed to get back money owed to Damas, the company said in a statement yesterday. The money represented Damas’s share of proceeds from exiting foreign ventures, according to Sanjay Kalsi, the company’s chief financial officer.
“There are certain regions we’ve exited from and we’re recovering money there,” he said, declining to name which regions those were.
Damas, once a darling of investors, was forced to restructure its business after $165m of unauthorised transactions were unearthed in 2009 and its former chief executive resigned.
"We have created a taskforce to focus on financial recoveries for the company," said Anan Fakhreddin, the current Damas chief executive. "We have concluded several agreements to recover funds from different sources that were owed to us.
This is a positive step in our ongoing restructuring and we are ensuring that we allocate sufficient resources to recover outstanding dues owed to us."
Damas is one of the biggest and oldest jewellery retailers in the region, with hundreds of stores and a history dating to 1907.
After the company sold shares to the public in 2008 and listed on the Nasdaq Dubai, one of its majority owners and its chief exeuctive - Tawhid Abdullah - continued to treat the company as a private business, siphoning off funds for personal investments and other purposes.
When the unauthorised transactions were discovered in October of 2008, the Mr Abdullah and his two brothers, Tawfiq and Tamjid, quickly produced a list of assets they planned to sell and agreed to repay the $165m in 18 months.
The Dubai Financial Services Authority (DFSA), which regulates companies listed on the Nasdaq Dubai, commenced an investigation. An accounting firm was hired to look at the company's books. In March of last year, the DFSA fined Damas Dh13.5m over the transactions and dismissed its board of directors.
The regulator also banned the Abdullah brothers from serving as directors in Dubai's financial centre for 10 years, ordered them to pay back Dh365m in cash and return 1.94m grams of gold taken from the company for personal use.
The investigation also revealed that Damas loaned $80m to a unit of Dubai Holding to buy stock in its initial public offering, a deal that was instrumental in raising interest in the listing. The latest round of attempts to recover money for Damas comes as it continues to try to turn its business around and put the $165m scandal behind it.
The unauthorised transactions forced the company to restructure its debts last year, when Mr Fakhreddin was appointed to help turn things around.
After numerous delays, Damas reached a deal early this year to restructure more than $800m in loans, but was still trying to recover funds from the Abdullah brothers, who were taken on last year as senior advisers despite being fined and dismissed from the board.
In April, Damas extended the deadline for the Abduallah brothers to repay what they owed. It was also revealed that month that they owed an additional Dh1.2bn to banks, bringing their total dues to both banks and Damas to Dh1.8bn.
In May, Damas gave the brothers more time to repay about Dh600m worth of cash and gold. The company last month reported profits of Dh53.3m for the year to the end of March, reversing a Dh2bn loss in its previous financial year. As of last month, the Abdullah brothers still owed money to the company.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Sanju
Produced: Vidhu Vinod Chopra, Rajkumar Hirani
Director: Rajkumar Hirani
Cast: Ranbir Kapoor, Vicky Kaushal, Paresh Rawal, Anushka Sharma, Manish’s Koirala, Dia Mirza, Sonam Kapoor, Jim Sarbh, Boman Irani
Rating: 3.5 stars
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
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What is Diwali?
The Hindu festival is at once a celebration of the autumn harvest and the triumph of good over evil, as outlined in the Ramayana.
According to the Sanskrit epic, penned by the sage Valmiki, Diwali marks the time that the exiled king Rama – a mortal with superhuman powers – returned home to the city of Ayodhya with his wife Sita and brother Lakshman, after vanquishing the 10-headed demon Ravana and conquering his kingdom of Lanka. The people of Ayodhya are believed to have lit thousands of earthen lamps to illuminate the city and to guide the royal family home.
In its current iteration, Diwali is celebrated with a puja to welcome the goodness of prosperity Lakshmi (an incarnation of Sita) into the home, which is decorated with diyas (oil lamps) or fairy lights and rangoli designs with coloured powder. Fireworks light up the sky in some parts of the word, and sweetmeats are made (or bought) by most households. It is customary to get new clothes stitched, and visit friends and family to exchange gifts and greetings.
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How to volunteer
The UAE volunteers campaign can be reached at www.volunteers.ae , or by calling 800-VOLAE (80086523), or emailing info@volunteers.ae.
Alita: Battle Angel
Director: Robert Rodriguez
Stars: Rosa Salazar, Christoph Waltz, Keean Johnson
Four stars
Juvenile arthritis
Along with doctors, families and teachers can help pick up cases of arthritis in children.
Most types of childhood arthritis are known as juvenile idiopathic arthritis. JIA causes pain and inflammation in one or more joints for at least six weeks.
Dr Betina Rogalski said "The younger the child the more difficult it into pick up the symptoms. If the child is small, it may just be a bit grumpy or pull its leg a way or not feel like walking,” she said.
According to The National Institute of Arthritis and Musculoskeletal and Skin Diseases in US, the most common symptoms of juvenile arthritis are joint swelling, pain, and stiffness that doesn’t go away. Usually it affects the knees, hands, and feet, and it’s worse in the morning or after a nap.
Limping in the morning because of a stiff knee, excessive clumsiness, having a high fever and skin rash are other symptoms. Children may also have swelling in lymph nodes in the neck and other parts of the body.
Arthritis in children can cause eye inflammation and growth problems and can cause bones and joints to grow unevenly.
In the UK, about 15,000 children and young people are affected by arthritis.
