DUBAI (Reuters) - UAE Jeweller Damas International said it was taking longer to recover the $55 million owed by its founders, the Abdulla brothers, due by April 30, but the delay does not mean a default.

Photo: www.damasjewel.com

Dubai-based Damas was ordered to dismiss its board and pay fines, after the company last year accused its former head of involvement in $165 million of "unauthorised" transactions.

"Given the complexity involved in transferring/selling the assets declared to the company, it is taking more time to affect the recoveries as per the timeline mentioned in the previous announcement by the company on 4 November 2009," Damas said in a bourse statement on Sunday 9 May.

However, the delay in payments does not constitute an event of default under the agreements, it said adding that efforts were underway to repay the amounts either in cash or by transfer of assets.

The company asked for trading of its shares to be resumed immediately, after it was suspended earlier on Sunday 9 May. The shares last traded at $0.18.

Damas replaced Chief Executive Officer and Managing Director Tawhid Abdullah last year after alleging that he made unauthorised transactions worth about $165 million. He has denied any wrongdoing.

The Dubai Financial Services Authority (DFSA) found that the "Abdullah Brothers", who it named as Tawhid, Tawfique and Tamjid Abdullah, owed the company $99.4 million cash plus the value of 1,940 kilograms of gold, which would be worth around $71 million at market prices.

The jeweller's board of directors has since been replaced, and bank creditors have agreed to a standstill agreement while the company restructures. (Reporting by Rachna Uppal; Editing by Erica Billingham)