"Corporate governance" and "transparency" are much bandied about, but rarely does the absence of those safeguards lead to the startling outcomes seen in the case of Damas International.
The jewellery company's Dh1.9 billion (US$517.3 million) loss is likely to be a much-needed reminder to executives that a lapse in controls at a corporation can lead to major financial losses.
Ibrahim Belselah, the executive chairman of Damas' board of directors, put it best in saying the losses were caused by the "failings of the then board of directors and, in particular, the actions of the executive directors, the Abdullah brothers".
Of course, the rising cost of gold and the global financial crisis contributed to Damas's losses, but the company's descent last year can easily be traced back to the unauthorised transactions carried out by the Abdullah brothers.
The more than Dh600m they owe directly is just the start.
Companies to which they lent gold are defaulting, non-core investments have soured and the cost of financing gold loans has increased.
All told, the lack of proper corporate governance by the top executives and board members led to more than Dh1bn of losses. And the pain is not over. Damas is still negotiating for a debt standstill before a painful restructuring.
Damas has come clean about the extent of its liabilities thanks to NASDAQ Dubai's strict disclosure requirements, but the revelations came too late for shareholders.
Other companies in the region, listed and privately held, should learn from this sorry tale and strengthen their oversight at the board level.
@Email:bhope@thenational.ae
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Padmaavat
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.