Sanjay Kothari on the Need To Address Bankruptcy Fraud in Indian Diamond Industry

Opinion piece
29/06/2016 11:14

The vast majority of the diamond bankruptcies of late, however, have NOT been a result of business miscalculations, market downturns, or bad timing. They have all been planned, well-orchestrated moves to intentionally defraud other diamond industry stakeholders, particularly banks, of large sums of money. Many of these people - particularly in India - have been declared wilful defaulters by the banks and the authorities. And we’re all braced for many more. In the Indian diamond industry, you can declare yourself bankrupt, leave dozens of banks and other diamantaires poorer by tens if not hundreds of millions of dollars, and exit without any action being taken. What is really shocking is that within months of declaring bankruptcy, many of these people are back in the diamond business, usually with a newly set-up company or in partnership with a relative already in the diamond industry.

Sanjay Kothari, former multi-term chairman of India’s GJEPC, on bankruptcy fraud in Indian diamond industry.