DFSA Takes Action Over Damas Failures
The Dubai Financial Services Authority (“DFSA”) today announced remedial action and enforcement sanctions against Damas International Limited (“Damas”) and its Board of Directors (“Board”) for their failure to exercise appropriate corporate governance over the company and its subsidiaries.
The remedial action includes the resignation of the Damas Board, the appointment of a new Board to govern Damas, and measures to enhance the governance, systems and controls of Damas so as to protect the company, its assets and shareholders’ interests. Damas has also agreed to the appointment of new auditors for the fiscal year commencing 1 April 2010.
The sanctions include financial penalties against Damas, Tawhid, Tawfique and Tamjid Abdullah, (“Abdullah Brothers”) and voluntary bans, for periods up to 10 years, on the Abdullah Brothers from acting as Directors of Damas or any company in the Dubai International Financial Centre (“DIFC”).
Today’s announcement follows an investigation by the DFSA into “unauthorised transactions” that were announced to the market by Damas on 15 October 2009.
The Chief Executive of the DFSA, Mr Paul Koster said: “Maintaining international governance standards and internal systems and controls as well as ensuring investor confidence is fundamental to the integrity of the market in the DIFC.
This action will remind Directors of public companies that they owe a duty to the company and their shareholders, which supersedes any duty they have to their private interests.
The range of measures, announced today, will assist Damas to conduct its business in accordance with the Laws and Rules of this jurisdiction.”
“In pursuing the objectives of the DIFC, the DIFC Registrar of Companies and the DFSA collaborated and concurred on the foregoing measures in its regulatory efforts to enhance corporate governance within Damas.” Koster said.