Damas CEO denies making unauthorised transactions

DUBAI Oct 13 (Reuters) - The former head of Dubai jewellery group Damas International Ltd DAMAS.DI denied his involvement in any unauthorised transactions after a company statement said he had resigned after disclosing unauthorised deals to the company's board.

"I did not do it," Tawhid Abdulla, who resigned on Monday, told Reuters in a phone interview on Tuesday. "The news about me making unauthorised transactions is not true," he added, declining to give any details on why he had stepped down.

Dubai Nasdaq-listed Damas had said on Monday it appointed Hisham Ashour, formerly deputy CEO, to take over Abdulla's post. It said Tawfique Abdulla, Tawhid's brother, had become managing director on a day-to-day basis. [ID:nLC467286]

The nature of the unauthorised transactions has not yet been revealed but the company said its initial estimate is that they could amount to approximately $165 million.

Damas said the Abdulla brothers, who own more than 50 percent of its shares, had agreed to repay money involved in the transactions. No more details were given.

The company has asked an independent audit firm to produce a detailed report on the unauthorised transactions, a Damas official said.

The company's shares initially fell as much as 13.5 percent after resuming trade, having been suspended the previous day, but were down just 0.3 percent at 1042 GMT. Some said the allegations should not have a major impact.

"I expect that this negative news is not going to impact the shares of Damas that much because it's such a huge gold retailer in both India and the Middle East," said a Dubai-based trader.

Dubai has the highest concentration of jewellery shops in the world, generating trade worth $35 billion in 2007 -- 20 percent of the $173 billion total global jewellery trade.

Authorities in Dubai, an emirate of the United Arab Emirates which was hit badly by the global financial crisis, last year launched a campaign to improve business transparency. A number of business and political figures have faced prosecution. (Editing by Natsuko Waki and David Holmes)