An employee pours molten gold from a crucible into a one kilogram mould after refining at the Kaloti Jewellery factory in Sharjah. In February, Britain’s Guardian newspaper and the BBC said the Dubai-based Kaloti Group, a major gold refiner and jeweller, had failed to examine suspicious deals, accepting for example 2.4 tonnes of gold from customers who provided no paperwork.

 

Reuters/Dubai

Dubai’s gold trading centre said it would tighten supervision of how the metal is sourced after reports in the British media alleging it ignored international guidelines designed to prevent human rights abuses and underground trade by African warlords.

In February, Britain’s Guardian newspaper and the BBC said the Dubai-based Kaloti Group, a major gold refiner and jeweller, had failed to examine suspicious deals, accepting for example 2.4 tonnes of gold from customers who provided no paperwork.

The reports also alleged the Dubai Multi Commodities Centre (DMCC), which hosts the emirate’s gold market, had failed to enforce guidelines against such deals.

Both Kaloti and the DMCC denied the reports and said they acted properly.

The DMCC’s chief executive Gautam Sashittal told a conference yesterday the centre would commission an expert advisory firm to conduct a further comparative study of various sourcing protocols and “review the robustness of our process”.

“We want to look the entire reporting and audit process and confirm we are in line with what others are doing,” he said. “Number two, the DMCC will create an independent body that will further strengthen the independence and integrity of the review process.”

The body will be appointed later this year and include a large proportion of local industry figures, as well as some international experts, Sashittal said.

On the exact role of the body, “it is very early to say that but it could be as narrow as advising us on the outcome of audits, or as wide as encompassing more of what we do with the delivery of certification.”

Sashittal repeated the DMCC had done nothing improper.

“Nothing was wrong and we stand by everything we did.” But he added, “Having said that, because there have been allegations made which are in our view unfounded, we wanted to take that extra step.”

 

Deyaar shareholders okay 25% foreign ownership plan

Shareholders of Dubai property developer Deyaar have approved a plan to allocate 25% of its share capital to foreigners, the company said yesterday.

At present, investors in Gulf Co-operation Council countries can own up to 49% of Deyaar’s shares; they currently hold 3.7%, bourse data shows, while those from outside the GCC have not been allowed to own any stake.

The company said the shareholders approved the allocation at a meeting last Thursday. Its share price jumped 11.8% as its shareholders met to vote on the recommendation made by the company’s board in February.

“With the UAE joining the MSCI Emerging Markets Index, it is expected that many global investors and institutions will adjust their emerging market allocations to the UAE,” Deyaar CEO Saeed al-Qatami said, commenting on the meeting. “We are confident, once implemented; the investor allocation will have a positive impact on the overall trading of the company’s shares.”

The company’s decision is part of a trend by companies in the UAE and Qatar to review their foreign ownership caps before international index compiler MSCI raises those countries to emerging market status in May, which is expected to attract fresh foreign money.