- Says Abdoola was sold a lemon and so will not take any disciplinary action against its MD
- Stands in sharp contrast to an investigation report on key point
Despite the publicly reported critical omissions in the corporate governance armoury at Turnstar Holdings at the time of the Dubai transactions, the company’s Board of Directors has told The Business Weekly & Review that it will not take any disciplinary action against Gulaam Abdoola.
Recently, The Business Weekly & Review sat down with Butler Phirie, a member of the board of directors who has been nominated for appointment as the Chairperson of the Board of Directors, for an exclusive interview. If appointed, Phirie will replace Patrick Balopi, one of the founding directors of Turnstar who has resigned as Board Chair but has availed himself for re-election as a director.
After months of trying to reach the board about the controversial Dubai debacle, Phirie was finally delegated to speak to The Business Weekly & Review on behalf of the Turnstar Board. The first question was that under Abdoola’s captaincy, Turnstar shareholders have lost over P70 million in a controversial deal. “As the Board, is there any disciplinary action that will be taken against Abdoola, considering that the transaction was initiated by him and completed under his captaincy?”
The question also put emphasis on the fact that the Desai Law Group (DLG) report subsequently questioned corporate governance at Turnstar at the time of the deal, as well as the weak structures that may have been unable to detect that something was not going right. The report stated that executive management likely breached their duty of due care and skill.
Phirie answered: “We as the board have taken a decision not to institute any disciplinary action against our Executive, based on the simple reason that he was only sold a lemon but did not deliberately sabotage the company.” He noted that after the storm that exposed the botched deal that cost Turnstar shareholders over P70 million, the Board of Directors engaged DLG to conduct a forensic investigation to get to the bottom of the matter. Phiri said findings of DLG showed that the Turnstar MD, Gulaam Abdoola, was cleared of theft and personal gain in the Dubai deal.
However, he does not dispute the findings that Abdoola was not cleared of “falling asleep at the wheel”. Infact, DLG found that under the stewardship of Abdoola at the time when the Dubai transaction was undertaken, Turnstar lacked an effective and functioning investment sub-committee the presence of which, in the law firm’s view, may altogether have made a difference in the outcomes of the Dubai transaction or at least mitigated the outcomes. It is such findings that motivated The Business Weekly & Review’s line of questioning.
In response, Phirie basically defended the Board and Abdoola’s apparent neglect and relative inattention and even the Board’s own inability to recognise that Abdoola’s associates in Dubai during the Palazzo Venezia deal may not have had the best interests of Turnstar at heart. The Board was also found wanting in the DLG report, particularly for weak governance structures. Notable was the lack of an investment sub-committee at the time of the Dubai deal that went awry. “This sub-committee would have been able to pick up several tell-tale red flags that pepper the Palazzo Venezia investment,” the DLG report noted. Also notable was the valuation used to purchase the property, that came to a staggering AED28 million. The value of the property, it turns out, was in reality in the range of AED10 million. It is this breathtaking difference that is a serious point of contention.
It was further reported that the MD of Turnstar, Gulaam Abdoola, had demanded a commission as a form of cover for a ‘shady deal’ in Dubai. Nevertheless, Phirie boldly told The Business Weekly & Review that Abdoola was exonerated by the DLG investigation report which, as a matter of fact, categorically disagrees with this assertion. “We have not seen evidence that suggests any form of complicity by Mr Abdoola in relation to any commission and, in our view, there is no wrongdoing,” said Phiri. “So we have taken a position not to subject him to any disciplinary process.”