Diamond Companies In India Can’t Cut It?

Diamonds last forever but diamond exporters and manufacturers still have to pay the bills.

InterJewel, an Indian manufacturer has reportedly defaulted on $100 million of obligations and Ankur Diamonds has filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in a US Bankruptcy Court.

Firms based in India can file for bankruptcy under Chapter 11 in the US if they have a subsidiary there.

Bank officials, however, told Mumbai Mirror that the consortium had taken a decision to stop extending credit to Interjewels. A letter from IndusInd Bank, dated August 24, a copy of which is with this newspaper, states, “Recent developments in your company and business has taken the member banks by surprise and made us quite concerned… Though you and all concerned are aware, we are the first charge holders over all your assets, book debt receipts, cash flow both present and future (including stock at various company locations and receivables), we reiterate our absolute (sic) of the consortium’s sole charge on assets in your possession.”

Around 25 diamond firms in India have closed this year, but Interjewels would be the largest.

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