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Winsome Diamonds begins legal proceedings against defaulters
The dues are around over $872 million
By: Diamond World News Service
Jun 4 2014 6:38PM
Reference: 9187  

Winsome Diamonds and Jewellery Limited (Winsome) has initiated legal proceedings against its clients in the UAE, as the company has not received payments as per their expectations’. These ‘defaulting customers’ in the UAE as the company notes, have dues worth over $872 million.

“We are compelled to take legal recourse as all options of persuading the defaulters appears to be exhausted. This step has been taken in the interest of the Company and all its stake holders and recover the outstanding dues, to come out from the present situation.” said Mr. Jaikumar Kapoor, Director of the Company.

The delay in receipt of inward remittances from the overseas buyers, caused Winsome Diamonds to default in its payments to bullion banks against Standby Letters of Credit (SBLC’s) of consortium banks, which triggered the acceleration clause whereby the bullion banks invoked all the SBLC’s, including those where payments were not yet due.

The Consortium Banks were obliged to make payments to bullion banks prematurely for the amounts which had not become due.

The overseas buyers have since admitted and acknowledged their debts.

Winsome has done business exceeding billions of dollars over the last decade with these buyers. The representatives from some banks have also met buyers/ buyer’s representatives in UAE.

Mr. Kapoor added that “We admit and acknowledge the debts to the banks and further added that there have been absolutely no diversion of funds. The banks’ action, declaring the company as willful defaulter and diversion of funds, appears to have been based on the purported report by one Kroll Advisory Solutions. For reasons unknown, we have not been provided with a copy despite several reminders, even after the cost for such report being debited to us. Kroll Report has been unilaterally prepared without verifying the facts from us, and the credibility of the report is highly doubtful.”

The company had earlier approached the Consortium for restructuring of the debt, to enable company’s continuity, and final clearance from the banks, where majority of banks had given their mandate.

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