The Dubai-based company said former CEO Tawhid Abdullah and his two brothers now have until April 30 to repay the 400 million dirhams.
A market watchdog in the UAE penalized the trio last year for a series of improper financial dealings involving more than two tons of gold and nearly $100 million in cash.
Damas said it pushed the brothers’ repayment date further out to give them more time to work out a deal known as a “cascade agreement” that includes outside creditors.
That deal is meant to provide a framework for selling off the brothers’ assets to cover their debt.
Not all the parties involved have yet signed on to that deal, which has been in the works since at least last year.
Damas didn’t provide details on the holdouts, but said it expects the agreement “will be signed by all remaining parties in the near future.” Getting the agreement wrapped up is a priority for Damas.
It reached a tentative deal with its 25 creditor banks last week to restructure $872 million of debt, but that pact only becomes effective if Damas can wrap up the Abdullah brothers deal.
Damas ousted Tawhid Abdullah as chief executive in October 2009 after he made what the company described as “unauthorized transactions” worth as much as $165 million. At the time, his brother Tamjid served on the company’s board, which was chaired by a third brother, Tawfique.
The Dubai Financial Services Authority slapped penalties on the brothers in March last year in response to the improper financial dealings and loose corporate oversight.
The regulator fined the trio and Damas $3.7 million and banned the brothers from serving as directors of it or any other company within the Dubai International Financial Center, a financial free trade zone. They were also required to make good on their earlier promise to repay nearly $100 million in cash and 1,940 kilograms of gold improperly taken from Damas.
Damas traces its history to 1907, when the Abdullah brothers’ grandfather began working as a goldsmith in Syria. It operates more than 400 stores selling jewelry and watches, mostly in the Middle East. It is one of the few family businesses that dominate commerce in the Gulf to sell shares to the public.
Although they were banned from the board and any other senior positions, the Abdullahs are still involved with Damas. All three were named senior advisers to the company in June.
