Lenders rule out Winsome Diamonds’ Rs 4k cr loan restructure

MUMBAI: The lenders to Winsome Diamonds and Jewellery have decided against restructuring loans of Rs 4,000 crore to the Mumbai-based company after a forensic audit pointed to siphoning off of funds. The audit has raised questions about the firms to which the company had exported jewellery as well as its quantum of exports, senior officials from a clutch of commercial banks told ET.


Winsome Diamonds and Jewellery, formerly known as Su-raj Diamonds, did not respond to the email sent by ET about the lenders’ move to recover the loan. A consortium of banks has lent Rs 4,000 crore to Winsome Diamonds and Rs 2,500 crore to its subsidiary Forever Precious.

If Winsome Diamonds goes under, the lenders will collectively bear a loss of Rs 4,000-5,000 crore because the security pledged with the banks is less than one-tenth of the total loan. The audit was carried out at the insistence of the corporate debt restructuring forum formed after PNB and Central Bank of India appealed to all lenders at the beginning of this fiscal to help revive the company by rescheduling their loans. The forum recommended an audit to track the flow of funds and the performance of the company.

The reluctance of the promoter Jatin Mehta to rejoin the board of Winsome Diamonds made the lenders even more suspicious about the management’s commitment to revive the company.

In the quarter-ended June, banks including PNB, Central Bank of India and Union Bank suffered losses on this account as the letter of credit devolved on them. The company informed the lenders that it was unable to repay the loans because the firms to which it and its subsidiary had exported jewellery had defaulted on payments.