Dubai: Officials of 15 banks met in Dubai on Wednesday to discuss growing concerns over the financial health of a (as yet unidentified) major jewelry chain which owes an estimated Dh550 million (US$ 150 million) to them and has allegedly defaulted on payments, banking and industry sources told Gulf News. Some banks are planning to lodge a formal complaint of “wilful default and financial fraud” with the Central Bank. The founder of the group has also gone missing. The group, founded three decades ago, currently has over four dozen stores in the UAE, Kuwait and Saudi Arabia.

Local and regional banks work on the reputation of a borrower. When a borrower is well established and has overdraft facilities from other banks, they usually do not carefully examine the detailed credit history of the borrower and are willing to give them loans in the millions, sources said. However, the CEO of a major jewellery chain told Gulf News: “This group has been in severe financial trouble for 8-10 years and I wonder how the organization was given loans.”