Sunday, March 21, 2010

STOP THE PRESS! DFSA TAKES ACTION AGAINST THE BROTHERS ABDULLAH



As longtime readers of this blog will know I have written extensively on the subject of The Great Damas Heist. I wrote not one but two articles on the damage this did to the DIFC generally. I wrote a few articles on the Heist itself and what I thought was a strange arrangement whereby the brothers basically agreed with themselves how they would go about repaying the money and suffered no regulatory sanction at all. I wrote about how the DFSA needed to be all over these guys and encourage my readers to take action.

Today they did take two actions. The First is an agreement with the Abduallah Brothers and the second is an agreement with the board of Damas itself. I have to go through the documents before I write a longer post but, having taken all involved to task so aggressively, I wanted to give credit where credit was due. It had bothered me deeply that a long night of financial opacity was descending on the DIFC, a place I had worked so long. Now that night has been broken by at least a single star of hope.

7 comments:

Anonymous said...

The total fine the brothers are paying is $3m with $2.7m suspended indefinitely. This is a joke frankly and again the kind of puppet regulation that should be rectified in Dubai!

Ken said...

I don't disagree with you though I think there is more to it than that... and this will be the subject of my very next post.

Anonymous said...

Unfortunately you are the joke for saying it is a joke. It is more than the $$'s at stake. It is reputational & loss of face. Your blog was too hasty assuming there was no investigation. It took time, as shown by the reports. Their is now also a criminal investigation. Not being able to be a board member for 10 years is not a joke!!

Anonymous said...

All this still does not stop the brothers from running the company.
They can still be CEO or CFO.
It's just they can't be board member UPTO 10 years (not necessary 10 Years)...Hmmmm

Ken said...

Anonymous II, I agree with you and that aspect of it is in my most recent blog post. I should also point out that the DFSA did not conduct its own investigation, it relied on the PWC investigation. There is also, as yet, no criminal investigation that I know of. If you are aware of something please publish another comment and I will follow up. Given that they stole $100 million I do think a $300,000 civil penalty is a little light, especially in a country that puts you in jail for bouncing a check. I guess we'll have to agree to disagree.

Anonymous said...

Not being a board member in DIFC. Most companies in the region are not part of DIFC and they do fine.

The fines are very small considering the fraud that was perpetrated. In my opinion, the criminal courts should be invovled and prosecute the brothers.

Given when they went public and the obvious fiduciarary duty they most have know about, and they completely ignored running the company as they always have.

this is just a slap on the wrist in my opinion. A case like this represents the region as much as the DIFC. If they get away with such there, then you can imagine what frauds are still not reported or still not caught that are going on.

There is no trust of the system and regarless of the PR about how great DIFC is in handling this situation, it's still disapointing and does not engender trust.

Anonymous said...

breaking news!!..interestingly, a couple was jailed for 1 year and fined for stealing sex enhancement cream from a supermarket...