A regulator in the UAE has hit Damas International, a Dubai-based jewelry giant, with unprecedented penalties over charges of corporate corruption.
The Dubai Financial Services Authority (DFSA), a regulator, blames the jewelry firm for failing to apply sufficient internal oversight and not preventing unauthorised transactions totalling $165 million.
The sanctions imposed by the watchdog include the resignation of the company's entire board of directors, fines totaling $3.7 million, and a 10-year ban on the three Abdullah brothers who oversaw the family-run business, from running any company in Dubai.
Damas was started by their grandfather over a century ago in the Syrian capital, Damascus.
The ruling also requires that the Abdullah brothers fulfil an earlier promise to repay nearly $100 million in cash and 1,940kg of gold improperly taken from the company, according to DFSA's regulatory filings.
Paul Koster, the DFSA's chief executive, said the penalties are the regulator's most severe since it was founded in 2004, and were meant to send a message that Dubai's regulatory standards aimed to emulate those of major financial centres.
"This is not a slap on the fingers," he said in reference to the intensity of the punishment.
"We try to say there are checks and balances within the system," he said.
Speaking to Al Jazeera, Koster said: "Clearly the authorities have said we want to be more transparent. There is a crackdown on corruption and we play our role in that and I think there is a message that Dubai will make changes that are required."
Financial analysts say the move is long overdue in the UAE where under-the-table dealings have helped fuel the economy.
Andrew Critchlow, a Dow Jones financial analyst, told Al Jazeera: "It's a positive step forward but I think it's a shock for a lot of people because I think the economy here is many ways still depends on these more nefarious ways to make money."
Al Jazeera's Dan Nolan reports from Dubai.
[March 23, 2010]