Winsome Diamonds refutes charges of any covert operations or siphoning

DW: In your recent letter to the BSE, you have mentioned the Minutes of Lenders Consortium meeting that took place in September 2013 and how it discredited the Kroll Report. Based on what did it discredit it?

(link to the letter: http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/9fcfaf16-c5ec-4374-8693-e42748616673.pdf)

WDJ: This meeting was attended by all the banks. Ms. Reshmi Khurana of KROLL informed that it has not audited any books of accounts of any establishment nor does it have access to any. She said that the report is based on market intelligence after conductinginterviews with various personalities in which case no documentary evidence is possible. She further informed that modalities of our investigation were exchanged with the officials of SCB the Lead Bank of Winsome Diamonds & Jewellery Ltd.

Members asked as to how the responsibility can be fixed in the absence of any proof. She informed that the banks have given the assignment to a reputed investigative agency whose report can be relied upon. She further informed that they requested Standard Chartered Bank to provide information relating to dispatch of goods to Dubai buyers to enable them trace the evidence of delivery of goods at the port of destination. However, we didn’t get the same.

She confirmed that the report is based on “hearsay” and when asked “How the ownership in all the 13 companies has been established in view of the fact that report of another investigative audit report, due diligence report of D& B have Found,” she informed, “Kroll report is based on information available from Corporate Registry office Dubai.”

This is the clear proof that she had no idea of how the report was prepared. All the Defaulting companies were from Sharjah, Free Zone Area. Corporate registry in Dubai would never have any details of a Sharjah Free Zone Company. She was lying to the Consortium. The consortium already had The Dunn & Bradstreet reports. These D&B reports gave details of the ownership of the defaulting companies. Hence it is clear that this report was made by someone else but was laid out on Kroll letterhead.

DW:You have said in your statement, that the case filed against you is political vendetta created by the media at the behest of your business rivals. But the CBI apparently has hard evidence on the diversion of funds. What do you have to say about this?

WDJ: The media has been misled because of the “false Kroll report”. The Sharjah Federal Courts have given a verdict in favour of the company after having Banking and Accounting experts make an audit of the customers companies. There has been no diversion of funds.The bank has also done an E & Y report on Winsome and found no diversion of funds.

The best evidence is in the banks’ case filed at DRT, Ahmedabad (Standard Chartered Bank vs. Winsome Diamond and Jewellery Limited - O.A. No. 304 of 2014 and against Forever Precious Jewellery and Diamond Limited - O. A. No. 174 of 2014), where the banks have specifically stated that the goods have been sold, supplied and delivered by the companies to its customers at UAE and the customers in turn have defaulted by not making payments. Apart from seeking decrees against the companies for the repayment of debt, the banks have sought further orders that the UAE customers deposit their dues to the companies directly into the designated account. Decrees have been passed by the DRT on this basis.

The fact that there has been a genuine business default is confirmed by the UAE expert reports and the decrees of the UAE courts as well as the DRT proceedings in India. The CBI has copies of all expert reports in the UAE proceedings as well as the DRT proceedings.

DW: The general consensus seems to be that the 13 UAE-based buyers are covertly operating with Winsome to siphon funds. How do you refute this?

WDJ:The records maintained by the banks for the last 20 years will confirm the fact that Winsomefollowed prudent policies for ensuring its continuous growth whether in terms of its reserves and surplus, its net worth, its fixed assets, its turnover, etc. The records maintained by the banks would also show that at all times the banks had accepted the soundness of the operations, business and working of Winsome, which made Winsome, a leading companyin the gold and diamond jewellery industry in India. The banks were always in the know of the working operations and financial status of Winsome. The banks held several meetings to review the data, information and operations of Winsome.

Winsome was also annually required to submit information to the banks in a prescribed format that was described as CMA – Credit Monitoring Arrangement. The said CMA data was extensively analyzed by the banks, which, whenever required, also sought for additional data and information for its assessment of the credit requirements of Winsome. In fact, Standard Chartered Bank, who was only a SBLC facility provider, entered into the business of providing Bullion supplies. Standard Chartered Bank was therefore, the beneficiary of both ends of the transaction. Standard Chartered Bank (Mumbai) was instrumental in proposing and initiating Standard Chartered Bank(London) in becoming a bullion supplier. It has come to our understanding that Standard Chartered Bank (Mumbai) received benefits from the bullion supplies made by Standard Chartered Bank(London). This demonstrates the tremendous confidence and unconditional acceptance of the Winsome's business model.

The loans were sanctioned by the banks after a thorough due diligence on the UAE customers through D&B reports. Over the last decade or so, Winsome has made sales and received approximately USD 1.91 billion from the UAE customers. The reports of the Sharjah Federal Courts confirm that these were business losses. There is no question of any covert operations or siphoning. Even today, Winsome and Foreverare making all attempts to recover the monies from the UAE customers.

DW: Can you tell us why a credible bank like Standard Chartered (and other banks) should bear a personal vendetta against Winsome Diamonds?

WDJ: The behaviour of the Standard Chartered Bank since 2012 including the creation of the Kroll report and its relationship with Jay Begani and some other Directors is deplorable. The CBI must open an Enquiry in to the acts of Standard Chartered Bank and then they will be able to find the truth. The representatives of Standard Chartered Bank, visited UAE along with the representatives of Winsome and other banks on several datesto meet Haytham and discuss the process of repayment of the outstanding amounts from the UAE customers. This evidently proves that Standard Chartered Bank has always been aware that the UAE customers are the ones that have defaulted in payments, which in turn proves that there has been no case of fraud, siphoning of funds or even willful default by Winsome.

Standard Chartered Bank’s mala fides and vendetta is exposed from the DRT proceedings. Because it is a court document, Standard Chartered Bank has stated the truth that the companies suffered a business loss. But consortium Banks led by Standard Chartered Bank continues to file criminal case despite the bank admitting and obtaining a decree on the basis that it is a genuine business loss.

DW:The whereabouts of Jatin Mehta are unknown. Recent reports suggest that he has become a citizen of St. Kitts and Nevis. Is this true?

WDJ: This is again news floated by Standard Chartered Bank and its cronies. Jatin Mehta had left India in April 2011. He had given up all his executive positions for settling out of India. For personal reasons, he took the citizenship of St. Kitts and Nevis. This was much before the defaults took place. We would like to inform you that though Jatin Mehta relinquished his executive position, he still continued with his personal guaranty for Winsome and Forever. Jatin Mehta has been contactable by the company directors and banks all through this period. He was at the meetings that took place between the customers, Directors of Winsome, and representatives of State bank of Mauritius. A settlement has been reached between the customer and State bank of Mauritius. Jatin Mehta runs his own business since 2012 and the banks and agencies also know this.

DW: A plausible link has been established between the alleged money laundering and Singapore-based IIa Technologies and US-based Pure grown diamonds. How do you deny this?

WDJ: The word “plausible link” is baseless and inflammatory. Let me correct you - there has been no money laundering. As mentioned in earlier replies, the customers have suffered a business loss, which has been now confirmed by the report with evidence submitted by the Banking and Accounting Experts to the Sharjah Federal Court. Both the Decrees of the Debt Recovery Tribunal in India as well as the Decrees by the Sharjah Federal Court clearly prove the Kroll report to be Fictitious and any money-laundering allegation to be untrue. Both the Decrees in India & UAE have clearly stated business losses as the reason for the default.

DW: In his report in Diamond Intelligence, Chaim Even-Zohar suggested that many of the UAE-based companies are in fact one-room offices with not enough staff or facility to store diamonds and jewellery. Is his allegation baseless?

WDJ:All the offices were located in Sharjah Free Zone Export area. The government of Sharjah owns the area and it allots offices to different businesses. It is fully secured and protected.This allegation was made in the created Kroll report. Winsome has been working with these customers since 2005-2006. We are not aware if this Kroll report was created by Chaim Even-Zohar along with Standard Chartered Bank.

DW: All the allegations aside, Winsome owes the banks several crores of rupees. What is the company’s plan in terms of repaying the debts?

WDJ: The banks are not interested in getting their monies back as we have already offered assignment of all the decrees received from Sharjah Federal Court of First Instance in their favor but they are not prepared for that. They have destroyed millions of dollars’ worth of machinery by keeping it, not selling it and allowing them to become scrap.

All the real-estate that was mortgaged to the banks is now being offered for less than half of the market value. Standard Chartered Bank has not taken proper action for recovery. They should be made responsible for their acts to destroy the recovery of the banks.There were two proposals given by the company. One during the time of CDR which was destroyed due to the Kroll report. The second proposal was rejected under the guidance of Standard Chartered Bank. State bank of Mauritius saw through these games and directly settled with the customers.Winsome has no business what so ever. If the banks want to recover their monies, they will have to have officers who can sit across the table with customer the directors of the company and look for a realistic solution.

According to the latest submission by Winsome Diamonds to BSE on 30th May 2017, legal notices dated 12th May 2017 were issued to the entities operating Times Now Channel namely Bennet, Coleman & Company Limited and Times Global Broadcasting Company Limited and to their directors and officers. In the legal notices, it has been pointed out that " the videos were false, scandalous and defamatory and broadcasting thereof was illegal."

Followed by this, Times Now has removed the videos and informed that " they kept the video in abeyance from their website www.timesnow.tv”