Lenders disappointment with court verdict in Atlas Jewellery owner case

The three year jail term handed over to MM Ramachandran, 74, the beleaguered Atlas Jewellery owner by the Dubai Courts on Thursday, has been received with disappointment by the gold jewellery and banking fraternity.The businessman who had a successful health care group in Oman and a large jewellery chain in the GCC countries with over 50 stores, had been in the gold and precious stones business since 1970s. A series of misadventures resulted in several defaults and he owed over Dh500 million to about 20 banks. Four cases were filed against him that led to his arrest in August.“Ramchandran could have done more to work out a settlement by raising money against his assets had he been granted bail. While this judgement might be in favour of his sponsors who will be able to recover amounts he owed by raising money by leasing out his shops, banks would either have to write off the money he owed them as bad debt or dig in for the long haul,” a banker told Gulf News.Another banker said that for Ramachandran this sentence was essentially about buying time to settle his debts. “The three year sentence is for the criminal cases filed against him. It will take into account the months he spent in police custody and typically three years means 1.5 years the way day and night constitute two days. With public holidays being counted as extra days and compassionate grounds being applied to person his age, he is likely to be released within one year. Once that is over it will take anything between three to five years for the civil cases to be tried which essentially gives him the time he was seeking. It also means the banks and the other parties he owes money to, are in this recovery process for a very long haul and it is likely they might have to settle for half the amount owed to them.”A leading jewellery wholesaler in the Gold Souk to whom the Atlas Group owed nearly Dh8 million was also disappointed. “For many days his lawyers were giving us false hopes that he has reached a deal with some business chain that will take over all the liabilities and settle our claims. It appears those were false herrings. Now with this sentence there is absolutely no hope of recovery for a long time as there is no one in his absence in his group who can give any guarantee,” he said.When asked by Gulf News if the group would appeal the sentence, Ramachandran’s assistant Shyam said: “We are still in court and give us time. I will make a statement today.”Employees at the group’s stores in Gold Souk in Deira declined to comment.