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NEWS BRIEFS
Abdullah Brothers Owe $490 MillionThe three Abdullah brothers who own Damas International owe a previously undisclosed $327 million (AED 1.2 billion) to banks, according to an article published in The National. The disclosure comes as the company, the largest jeweler in the Middle East, approaches a restructuring agreement. The debt, owed to more than 20 banks, is in addition to $163 million (AED 600 million) drawn from Damas International, according to a company spokesman.The Abdullah brothers — Tawfique, Tawhid and Tamjid — were the subject of the strictest regulatory action in the history of the Dubai International Financial Centre (DIFC) in March 2010 for improperly withdrawing $99 million (AED 365 million) of cash and nearly two tons of gold worth $68 million (AED 250 million) from Damas without shareholder approval. The Dubai Financial Services Authority (DFSA) accused the three of using the company as their personal bank and levied strong penalties against them and Damas. The brothers were banned from holding executive positions in companies in the DIFC for between five and ten years, including the 100-year-old jewelry business founded by their grandfather.The Abdullah brothers deny that they sought to defraud the company and have returned to the company as consultants in an effort to recover debts from gold traders. The Dubai Public Prosecution has not filed any criminal charges.Analysts say the underlying jewelry business, which has 500 shops in the region, is in good shape after the retailer reported a net profit of $1 million (AED 4.2 million) for the six months that ended on September 30.“Overall, Damas has got a good business model. If they can sort out the financial management of the company, they will be a force to be reckoned with in the years to come,” said Richard Adams, a retail analyst at Datamonitor based in Dubai.The Abdullah brothers are expected to sign an asset sale and repayment agreement “within a month.”— Additional reporting by Acquire Media.Esmerian Pleads Guilty to FraudAntique and jewelry collector Ralph Esmerian pleaded guilty to a three-count indictment of bankruptcy fraud, wire fraud and concealment of assets in a New York District courtroom as part of a plea agreement to reduce his jail sentence from 40 years to between eight and ten years.Esmerian confessed to attempting to conceal assets from bankruptcy courts and “double-pledging” collateral to obtain loans.Assistant U.S. Attorney David Massey asserted that Esmerian embezzled and double-pledged $20 million to $50 million. While Esmerian did not offer any exact figure, he did confirm that these assets were worth “at least $20 million.”Esmerian was arrested in November 2010 on charges of fraud connected to approximately $217 million in capital advances. A majority of those loans were used to purchase Fred Leighton, which filed for bankruptcy in 2008 and was subsequently purchased by Kwiat.Forevermark Selects Retail Partners in Mumbai and DelhiFollowing the launch of Forevermark in Bengaluru, India at the start of 2011, the De Beers Group diamond brand was introduced in Mumbai and Delhi through partnerships with designated retailers. Forevermark-authorized dealers in Mumbai include Anmol Jewellers, Giantti-Luxury Ensemble, Mahesh Notandas, Notandas & Sons, Manubhai Jewellers, Mehta Emporium, ORRA, Rose and Tribhuwandas Bhimji Zaveri — The Original. In Delhi, Forevermark partners are Bholasons Jewellers — Gold Souk & Karol Bagh, Blues Jewellery Company, Hazoorilal Jewellers, Khanna Jewellers, Notandas & Sons and Mirari.In celebration of its Mumbai launch, Forevermark showcased the world’s largest pair of identical, 35-carat, D, flawless round brilliant-cut diamonds, the Steinmetz Yin Yang. Stephen Lussier, Forevermark’s chief executive officer (CEO), stated, “Taking the lead from our launch in Bengaluru in January, we are looking forward to seeing yet more success in Mumbai and Delhi both in the immediate and long-term future. The Indian diamond market is one of the fastest growing in the world and we see now as the right time to be expanding Forevermark’s footprint here, particularly in the vibrant and dynamic cities of Mumbai and Delhi.”Forevermark plans to announce partner jewelers in Chennai, Hyderabad and Kolkata in the coming months.Article from the Rapaport Magazine - May 2011. To subscribe click here.
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