The new chief of the Dubai jewellery giant Damas International says his first task will be to streamline the company to focus on its core business as it recovers millions of dollars owed to it and two tonnes of missing gold. Anan Fakhreddin, an industry veteran who most recently served as the World Gold Council's managing director for the Middle East and Turkey, was named the chief executive of the region's largest gold and jewellery retailer yesterday.
"My biggest priority is to streamline all the operations and maximise the efficiencies and maximise the return on investment for the shareholders of Damas," Mr Fakhreddin said. His appointment comes after six months of uncertainty following the departure of the former chief executive and member of the company's founding family, Tawhid Abdullah, who stepped down in October. Mr Abdullah left after disclosing "unauthorised transactions" worth about US$165 million (Dh606m), leading to an investigation by the emirate's financial regulator, the Dubai Financial Services Authority (DFSA).
The DFSA later imposed record fines and unprecedented actions against Damas, and Mr Abdullah and his two brothers Tawfique and Tamjid, who also held senior positions at Damas. The three brothers were banned from executive roles at any Dubai International Financial Centre (DIFC) company for between five and 10 years. Mr Fakhreddin is the second chief executive to be appointed since Mr Abdullah's resignation and replaces the acting chief executive, Sanjay Kalsi.
Mr Kalsi will resume his responsibilities as the chief financial officer, the company said. Mr Fakhreddin was also appointed to Damas's board of directors last month. He worked at the World Gold Council for 13 months, and before that he was at the Diamond Trading Company, a subsidiary of De Beers, covering the Gulf region for almost nine years. The new chief executive said he intended to use this experience to help steer Damas towards what it does best: making and selling jewellery.
"We will have to focus on our stronghold when it comes to jewellery, which is mostly retailing," Mr Fakhreddin said. "From now I can tell you, it will basically be the new era. The new phase we will be entering will focus more on the core business of Damas." In March Damas, which has more than 500 stores in 18 countries, negotiated a standstill agreement on about Dh3.2bn of debt with most of its lenders.
And on April 30, the Abdullah brothers failed to meet the deadline for the first instalment of the money and gold that the DFSA said they improperly withdrew from company accounts for personal investments. Mr Fakhreddin said these obligations would be among the first matters to be addressed. "I think if we have immediate priorities, it is in terms of making sure that all the commitments that were made by Damas, whether it is to the DFSA or to the banks, are being fulfilled to the fullest extent," he said.
He added that he did not foresee problems in recovering the money owed by the Abdullah brothers and that their failure to pay the first instalment was not a default. "It's an obligation on the brothers and we expect full compliance with it," he said. "And we haven't seen any signs otherwise in our most recent discussions." The Abdullah brothers do not have roles, advisory or otherwise, within Damas, Mr Fakhreddin said.
"We are strictly enforcing all the recommendations of the DFSA and until further notice, basically they still have no formal position within the company." He said Damas aimed to be as transparent and compliant as possible and to reassure investors. Mr Fakhreddin said it was too early to comment on Damas's specific restructuring or its international expansion plans, but he said that despite the company's difficulties the Damas brand was relatively untarnished in the eyes of consumers.
"Most of the issues we were facing were not of great significance to consumers," Mr Fakhreddin said. "The confidence that consumers have in Damas is still there. "We still offer them the same product, the same quality at the same price and of course, with the same level of service. None of that has changed." aligaya@thenational.ae