Dubai based jewellery Atlas has asked for more time from the banks to come up with a repayment plan on defaulted loans of more than AED 500 million. Officials from Atlas gold and jewellery retailer have met with representatives of their creditors on Wednesday, sources have claimed.

The defaults of Atlas, which has over 50 branches in the GCC region and India, will affect over 15 banks and reaching a conclusive deal won’t be easy, as M.M Ramachandran, the founder of Atlas, is still in police custody, after being arrested on the 23rd of August in cases related to bounced cheques.

Atlas spokeman, Shyam Mohan, is reported to have said that they have assured the banks to clear all debts and present a few options that the banks can choose from.

A banker is quoted to have said that Atlas will outline their repayment plan in a week. While Atlas does have assets, unless a meeting with M.M. Ramachandran is held and matters discussed on how to settle the issue, progress will be difficult to make, another banker is reported to have said. A third banking source said that banks are working along with Atlas jewellery to ensure M.M.Ramachandran is released on bail and his charges suspended to ensure that the necessary talks can take place at the earliest.

Founded in 1981 by Ramachandran, Atlas Jewellery started its venture from Kuwait, but was forced to move its operations to Dubai, as business was suspended during the first Gulf War. Apart from gold and jewellery, Atlas also have various other interests in health care and real estate and oversees the management of two hospitals in Muscat, the capital of Oman.

Among the options present to the banks are to seize Atlas’s assets in India or Oman, but complications are expected to arise as these assets are overseas.

This is yet another scandal that has hit the gold and jewellery sector in Dubai which was recovering from the March 2010 scandal of the sanctions passed by Dubai Financial Services Authority on three brothers in charge of Damas International, after their unauthorised withdrawal of gold and cash above AED 365 million.