News Column

Conflict zone gold flow to Dubai denied

February 27, 2014

Dubai



The Dubai Multi Commodities Centre (DMCC) and Kaloti Jewellery Group have denied reports that gold from conflict zones is being allowed to flow into Dubai, a report said.

A former partner of Ernst and Young, Amjad Rihan, had claimed in reports published in international media that gold was being imported with silver coating and billions of dollars worth of gold was being bought by cash.

Dubai has during the last two years put in mechanisms that would prevent the easy availability of gold from conflict zones, a Gulf News report said quoting local bullion trade sources.

This meant that the wholesale buyer will need to be sure not just about the supplier's credentials about the sanctity of the bullion, but even confirm that the supplier's own original sourcing of the same meet the norms, the report said.

Kaloti also issued a statement saying there has been no evidence in any of E&Y findings that Kaloti sourced gold from conflict zones.

"Any non-compliance during the initial audit stage was related to specific documentation anomalies, which were swiftly rectified, and not to any findings of conflict gold within the supply chain," the statement quoted Tarek El Mdaka, managing director at Kaloti.

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"In all of Ernst & Young's reports and findings during the process, Kaloti was never found to be sourcing from conflict zones," he said.

A report in BBC, quoting Rihan, said that Kaloti, Dubai's biggest gold refiner, had committed serious breaches of the rules designed to stop gold mined in conflict zones from entering the global supply chain.

Rihan led an Ernst & Young team that audited Kaloti and found it was failing to carry out the proper checks, it said.

But after he told the Dubai regulator, it changed its audit procedures. He said that allowed details of the most serious findings to be covered up, with Ernst & Young turning a blind eye.

However, the regulator, Ernst & Young and Kaloti all say they acted properly, said the BBC report.

Rihan told BBC Newsnight: "The risk of conflict gold entering Dubai and entering the global supply chain is extremely high."

 

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Source: TradeArabia


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