Damas India plans on hold

Damas India plans of opening 100 stores are on hold as the unauthorized transactions by the three

Abdullah brothers, members of the company’s founding family, have cut into the jeweler’s finances. The Indian retailer Gitanjali Group planned to start opening the first 30 Damas-branded stores in its next financial year, which begins at the start of next month. But it has not yet received the initial investment of $32.9 million from Damas.

 

The joint venture with Gitanjali, in which Damas has a 51 per cent stake, was to be its first big push into the lucrative Indian market. The new stores would have represented about 20 per cent of its business. Apparently the Abdullah brothers used the bank accounts of Damas for personal use. Now the jeweler owes banks billions. Also, it faces a fine imposed by the Dubai Financial Services Authority. This makes a push into India increasingly unlikely.

The trouble began for Damas when Tawhid Abdullah disclosed that he made Dh 600 million worth of unauthorized transactions and stepped down from his post at the publicly listed company. Tawhid and his two brothers, Tawfique and Tamjid, later entered into a formal agreement to repay the company over 18 months, and pledged to return 350 million of their shares if they failed to meet their obligations. But in December Damas said it needed to restructure the company and reach a debt standstill to remain in business.