Fearing takeover, Winsome Diamonds accuses banks of crippling it

Mumbai: A day after the RBI allowed lenders to take control of chronic defaulting companies, one of the biggest stressed borrowers, Winsome Diamonds, today said it is committed to recover money from its UAE customers to pay back the lenders but accused them of sabotaging its efforts.

"It is well known that you have been making back-room attempts to ensure that the company fails in its process to recover dues from the UAE customers and repay the consortium of banks," the company, which owes close to Rs 7,000 crore to 15 banks, said in a letter written to Standard Chartered Bank (StanC), which was sent to the exchanges this evening.

While StanC was not available for comments, calls made to Winsome did not elicit any response. The company owes the money to two sets of lenders, one of which is led by StanC and two bullion bankers, while the other is led by Punjab National Bank, which has an exposure of over Rs 1,800 crore.

In the over 20-page letter written on May 30 but released today to the exchanges, Winsome said it has been working with its lenders through the last four years of difficulties and informing them of progress made on the recovery from its customers in the UAE, who owe over USD 1 billion against the supply of gems and jewellery.

According to the letter, the customers, led by one Betham, are unable to pay on account of suffering forex losses. It said going to the UAE courts now remains the only option to recover the dues, but accused the banks of not funding the litigation which could have helped them recover their money as well.

"... the banks refused to finance the UAE litigation for recovery of USD 1 billion on frivolous grounds," it said, asking the banks to disclose "correct facts" to the RBI. The troubled jewellery firm alleged banks have also refused to share findings of an investigative audit on the company done by Kroll Advisory Solutions on the request of the consortia, saying this "only re-affirms the conspiracy to destroy the company". The company's scrip gained over 3 per cent to close at 34 paise on the BSE today.

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