Damas shuts down Stefan Hafner as losses mount

Jewellery group Damas International Ltd said on Tuesday it will shut its Italian unit, Stefan Hafner SPA, after its shareholders voted to wind down the loss-making unit.

Damas took over Stefan Hafner, which has flagship stores in Dubai and Moscow as well as locations in Madrid, Barcelona and London, in 2004 and held an 87-per-cent stake.

"The shareholders have decided to go for voluntary winding up in order to prevent further losses," Damas said in a statement.

Dubai Nasdaq-listed Damas shares were down 0.3 per cent, having fallen as much as 13.5 per cent earlier in the day.

The UAE firm said the Italian business recorded a loss of €4.2 million in its audited balance sheet of December 2008.

Damas said Stefan Hafner accounted for less than 2 per cent of its total revenues in 2008/2009. The jeweller said it had booked adequate provisions against the losses in its fiscal year-end results in March, 2009.

Stefan Hafner also designs and distributes jewellery under the Iosi, Porrati and Nouvelle Bague trademarks.

In a separate development, Damas appointed Hisham Ashour as chief executive officer and managing director on Monday, replacing Tawhid Abdulla, who the company said had resigned after disclosing "unauthorised transactions".

Damas said Tawfique Abdulla, Tawhid's brother, was now managing director on a "day-to-day" basis.

Tawid Abdulla told Reuters on Tuesday he did not make any unauthorised transactions.