A Dubai-based gold and jewellery retailer that defaulted on loans worth about Dhs 500m ($136m) has asked banks for time to put together a repayment plan, the company said on Thursday.
Officials of Atlas Jewellery, which has more than 50 branches across the Gulf and India, had a meeting with representatives of its creditors on Wednesday, three banking sources told Reuters.
“We assured the banks we will pay all the debts,” Shyam Mohan, Atlas spokesman, said. “We will present two or three options to banks who will select what is best for them.”
It is the latest scandal to hit the jewellery business in Dubai, a major centre for gold trading. In March 2010, the Dubai Financial Services Authority sanctioned three brothers behind Damas International over unauthorised withdrawals from the company of gold and cash worth about Dhs 365m.
The Atlas default affects at least 15 banks, sources said this week, and two bankers said reaching a deal would be tricky unless creditors can meet its founder, M.M. Ramachandran, who remains in police custody.
Ramachandran was arrested on August 23 in cases relating to suspected bounced cheques.
“(Atlas) will be outlining their repayment plan within a week. We have to wait to see that,” one banker said.
Atlas Jewellery was founded by Ramachandran in Kuwait in 1981 and moved to Dubai after its trading was suspended by the first Gulf War. It has interests in real estate, healthcare and owns and manages two hospitals in Oman’s capital, Muscat.
“They do have assets but unless we bankers meet him (Ramachandran) and discuss ways and means of settling the matter, not much may be achieved,” a second banker said.
A third banker said some of the banks were working with Atlas Jewellery to get Ramachandran released on bail or have any charges suspended altogether to enable talks to take place.
One of the banks’ options included seizing and selling off the assets in Oman, or two other companies in India that Ramachandran has stakes in, the third banker said, though this was complicated as the assets were overseas.
The sources declined to be named as the discussions were being held in private.