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Be Careful Of Buying Diamonds


wealthymatters

In the past few months, the diamond bourse in Mumbai and several dealers of the stone have installed a small, black machine in their offices. The little device, which can be mistaken for a laser printer linked to a computer, is one that separates the natural rough diamonds from the much cheaper synthetic stones.

The timing is interesting and unmistakable. At the time, the Winsome group, India’s largest bank defaulter (with loan outstanding bigger than Kingfisher’s),emerged as the world’s largest maker of synthetic diamonds. While in India, banks have directed forensic audit on Winsome and government agencies are probing the money trail following the Rs 6,500 crore credit default, Winsome has consolidated its position as a leading player in man-made diamonds by operating from its bases in Singapore, Malaysia and the US.

Selling man-made diamonds, which are almost 30-40% cheaper than the natural ones, is a legitimate business. But what is worrying the trade in Mumbai and Surat is the undisclosed mixing of the two varieties of stones, the failure of dealers to segregate the synthetic ones which have almost all the physical characteristics of natural diamond, the presence of unscrupulous elements, and the bad name it can bring to a business that’s based on trust.

These diamond merchants, who installed automated melee screening machines, were reacting to market intelligence and unconfirmed reports that the import of synthetic diamonds was on the rise and instances of undisclosed mixing of natural and synthetic stones. Most sightholders -the preferred customers of the leading global supplier Diamond Trading Company -have installed screening devices, and representations have been made before the government to introduce differential duty structure to curb abuse. But even as they put in checks and balances, trade members are keeping a close watch on the Winsome group which once had a run-in with American authorities over synthetic diamond business carried out by an US company where the group had interest.

Promoted by Jatin Mehta (whose family is related to the Adanis by marriage), Winsome has failed to repay banks that issued standby letters of credit to enable the company to import gold. Winsome said that it was unable to repay because its overseas clients were not in a position to pay back. Over the weekend, diamond houses subscribing to http://www.moneylaundering.com, the newsletter released by ACAMS (an association of finance professionals), were exchanging among themselves a report that said : “When Winsome defaulted on the loans, subsequent forensic investigations by Kroll Advisory Solutions concluded that most of the buyers appeared to have no secure way to store the gold, many of the businesses had been incorporated on the same day and Haytham Obidah, the business associate of Mehta, wholly owned or controlled all of the firms…“ Winsome has not taken kindly to some of the bad press. Seeking a billion dollars in damages, Winsome has recently sued the Israeli diamond analyst Chaim Even-Zohar, a widely followed name in the trade, over an editorial published in Diamond Intelligence Briefs. The outcome will be closely tracked in the world of diamonds.

 

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About Keerthika Singaravel
Engineer,Investor,Businessperson

2 Responses to Be Careful Of Buying Diamonds

  1. Mamady Konaté says:

    Dear Madam/Mr,

    We are looking for partner in building a local mining company or serious cash buyers of AU Gold and rough and uncut Diamonds, my father and others are local sellers and miners of Gold and Diamonds here in Guinea, they want to get money to help our families as you know here in Africa we have many people in our families, they are counting on
    some people who went to school to help them but these people just want to steal their products even the government promised to help our community but since my father gave them produts they’ve been just telling story every day, every time. This is the reason why our community decided to contact the good people.

    Due to the way they are mining their products many people are trying to teach them because they don’t know the world market even some mandates and buyers rep have come and carried their products on credits and they have never come back to pay their money. Right now i want to get them serious people who can help them to sell their products following the market. At the moment they have GOLD DUST/BARS
    and ROUGH/UNCUT DIAMONDS in large quantities for sale at cheap price.

    They need people like you, people over there to help them develop their goal, so that they can help our community, because people sicks and dies because no money. They have the products but they are very poor here because of the way the government and some people are treating them, they want serious buyers to be their eyes and mouths, they are ready to give you goods if you are serious and ready to open
    a local mining company with them to work together and help them and you in mutual benefit or help them buy their products so that they can at least buy mining equipments such as, bulldozers, tractors, excavators, wheel loaders, backhoe loaders, motor graders, dump trucks, crushing equipment, and etc as we need to enhance our mining productivity. We will give you good price far below the word market price.

    Hope to hearing from you soon.

    Thank you,
    Mr Mamady Konaté
    Community representative
    Siguiri Gold and Diamond local
    mining community company,
    BP:3005, Siguiri,
    Republue de Guinea
    E-mail: k.mamady82@yahoo.fr / kmamady82@gmail.com
    Tel: +224657629251

    • Readers may proceed on their own initiative and at their own risk, after doing their own due diligence and taking required precautions. I have no knowledge of these people and their business.

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