Damas bros. to sell shares in scandal aftermath

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Jewellery shares sale will help pay back unauthorised withdrawals.

Damas’s majority shareholders, the Abdullah brothers, are set to sell off some of their stake in the Dubai-based jeweller in an attempt to repay debts racked up when the brothers made unauthorised withdrawals from the company.

The jewellery business, which floated on the Dubai stock exchange in 2008, made a regulatory filing to NASDAQ Dubai announcing the intention of the brothers to appoint a financial advisor to assist them in selling their shares for at least 45 cents a share.

The brothers – chairman Tawhid Abdullah, managing director Tawfique Abdullah and deputy managing director Tamjid Abdullah – own more than half of Damas.

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It was unveiled in 2009 that the Abdullah brothers had withdrawn AED614m (£107.5m) of company money for personal use; a revelation that forced the company into a restructure in March. A debt restructuring for US$872m (£560.8m) was signed by 25 lenders including Barclays.

A sale of shares could go some way to helping repay the brothers’ debt. In May it was ruled that the brothers would adhere to a cascade agreement that stated the Abdullahs would repay what was owed over an agreed period of time through asset sales.

Damas, which was founded in 1907, runs a major jewellery business from its base in Dubai that has successful retail and wholesale arms. Its retail business now operates 296 stores in 12 countries.

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