Kaloti Group ‘compliant with Dubai
gold audit? Tradearabia

Mr. Munir R. Kaloti, President of Kaloti Jewellery International DMCC stated: “The DFSA confirmed that neither I nor the Kaloti Group of Companies are or were part of the DFSA’s investigation of Deutsche Bank. The manner in which my name was cited in the claim was extremely damaging to my reputation and my lawyers are investigating why this was the case. I was given no prior warning that I would be named and had at no time been contacted by either party regarding my account.”

“Nonetheless, I want to make it clear that I have authorised my office to submit all documents in my possession should they be requested by the DFSA,” he said.

On November 17, 2013 DFSA had announced that it had commenced proceedings in the DIFC Courts to enforce compliance by Deutsche Bank DIFC Branch (DBDIFC), with a notice requiring information.On November 21, 2013 DFSA confirmed that neither Munir Kaloti nor the Kaloti Group of Companies are or were the subject of the DFSA’s investigation of Deutsche Bank DIFC branch.

Kaloti Group of Companies published on November 27, 20013 a self-evaluation titled “DMCC Responsible Sourcing of Precious Metals Guidance Compliance Report” and a report Ernst & Young Dubai commissioned from Kaloti Group of Companies titled “Independent Reasonable Assurance Report”.

Katloit’s “Compliance Report” outlines the steps taken by Kaloti Jewellery International DMCC (KJI) and Kaloti Jewellers Faclory Ltd. (KJF) to achieve full compliance with the DMCC’s Responsible Supply Chain Guidance as well as following all international regulations covering Anti Money Laundering and Terrorist Financing.

Katoti Jewellery International DMCC (K]I), which is based in Dubai, is responsible for the management of all aspects of the physical precious metals business in the United Arab Emirates. It is the licensed entity that faces clients and counterparty service providers such as international bullion banks, security and logistics companies, insurance and airline firms. Kaloti Jewellers Factory Ltd. (KIF), an independent entity based in Sharjah, is the refinery service provider of the Kaloti’s United Arab Emirates operations and is the entity that enjoys Dubai Good Oelivery accreditation. References to systems, procedures and controls in this refinery report collectively cover both KJI and KJF.

Not surprisingly, the self-evaluation comes to the conclusion:

• We have fully implemented all aspects of the Practical Supply Chain Guidance issued by the Dubai Multi Commodity Centre (DMCC) which is based on the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. We are fully committed to adopting any future guidelines, rules or regulations with res pect to the responsible supply of gold and precious metals and all other international rules relating to anti-money laundering and the fighting of terrorist financing.

• We will continue to strive to upgrade and improve our risk classification and risk mitigation processes and educate our staff and our suppliers on an on-going basis to ensure that the highest possible standards of responsible supply chains a re maintained.

Ernst & Young Report “Independent Reasonable Assurance Report on Kaloti Jewellers Factory Ltd’s Refiner’s Compliance report”

As can be expected, the commissioned Ernst & Young report resulted in EY’s opinion, that the Refiner’s Consolidated Compliance Report dated 27 November 2013 in all material respects. describes fairly the activities undertaken during the period from 1 June 2012 to 31 December 2012 and in cases where high and medium risks deviations were noted, the subsequent corrective action plan implemented to demonstrate compliance and management’s overall conclusion contained therein is in accordance with the requirements of the DMCC’s Practical Guidance for Market Participants in the Gold and Precious Metals Industry, version 1 April 2012 and with the DMCC Review Protocol on Responsible Sourcing of Precious Metals in issuance as at the date of this report.

However the EY report made the following caveat:

Without modifying our conclusion, we draw attention to

• the respective instances of deviations noted for the period from 1 June 2012 to 31 December 2012 set out in the Refiner’s Consolidated Compliance Report at the end of Steps 1 and 2 that have been subject to a subsequent corrective action plan; and

• the description at the end of Step 2 of the Consolidated Compliance Report of the corrective actions on assisting suppliers in moving away from cash settlement that was remediated in November 2013 subsequent to the implementation of the corrective action plan

The German financial watch-dog BaFin had hired Ernst & Young in August 2013 to investigate Deutsche Bank’s alleged AML/CFT deficiencies. This is another disturbing example that the auditors, the so-called gate keepers, have a conflict of interest by indiscriminately serving all parties.
Kaloti_Compliance_Statement_27.11.13
EY_Kaloti_Evaluation_27.11.13