A few years ago, Kroll investigators uncovered an important detail about the Jatin Mehta-controlled Winsome Diamonds and Jewellery Ltd.’s allegedly fraudulent $1.25 billion banking default in India. The investigative firm claims that part of the missing money may have been invested in Jatin and Sonia Mehta’s synthetic diamond companies – Gemesis which later was renamed IIa Technologies in Singapore. Gemesis is also a precursor to Pure Grown Diamonds which markets the synthetic polished output in the United States. To be precise, Kroll reportedly stated that “Winsome could not satisfactorily disprove this diversion of funds to the Gemesis company.”

Whether Kroll has hard evidence, I wouldn’t know. Banks have demanded information on the source of the unsecured loans appearing in the 2012 and 2013 financial reports of the synthetic producer. However, if such a connection was positively confirmed, all the synthetic gem-quality diamonds produced by IIa Technologies and/or marketed by Pure Grown Diamonds (or others) could be considered the “fruits of laundered money.” This means that these diamonds could be confiscated in the United States, alongside other acquired assets. The anti-money-laundering laws there are very specific on this. Today’s revelations in Diamond Intelligence Briefs provide an additional angle that may assist law enforcement, the banks and the Indian government to get to the bottom of this affair.

 

The Dubai Link

The “link” is in Dubai. The Indian police investigators of the defrauded 15-bank consortium and our journalistic sleuthing have focused on the same goal: to identify the “real” beneficial owners of the 13 Dubai companies that all simultaneously defaulted on their payments for the diamond and gold jewelry they had purchased from Winsome in India. These shipments had been financed with moneys borrowed from the banking consortium. The debts of these 13 Dubai companies to Winsome (and a subsidiary) have already been confirmed by UAE’s Sharjah Court of First Instance.

 

However, the expert reports prepared for the court concentrated on proving the debts, not on uncovering the beneficial owners of the companies.

 

Incredibly, all 13 Dubai companies were controlled by one person, a Jordanian national residing in Dubai named Haytham Ali Salman Abu Obidah. (Some documents translated his name to Haitham Sulaiman Abu Obadiah.) Obidah is not just the owner of Italian Gold FZE, one of the group’s defaulters, he is, apparently, also 100% owner of several other companies in this group of defaulters. In addition, it is Obidah who represented all of the defaulters throughout their talks with lenders.

 

So it seems that Obidah is the defaulter – or at least that is what we are led to believe. There is mounting evidence that he is mostly a front acting on behalf of others…

 

Evidence is in Insurance Policies – in Belgium

Winsome maintains that the 13 Dubai defaulting companies are genuine third parties, not related to Winsome or to its promoter, Jatin Mehta. We have now discovered otherwise!

A few of these defaulting companies had been listed and issued as subsidiaries and associated companies in Su-Raj Diamonds’ (later Winsome Diamonds’) global insurance policy issued in Belgium.

According to several impeccable sources, this policy had been issued by the Driesassur Insurance Brokers, one of the most prominent brokerages in the diamond world, specializing in insurance products for the diamond and jewelry trade. The principal of Driesassur is Alain Spruyt. It has offices in the nine leading diamond markets, including, of course, Mumbai.

Several of these companies have been insured in the Winsome block policy as early as 2005 (and probably earlier). But the real giveaway of alleged criminal intent and careful planning of the defaults comes from a rather innocuous fact we discovered: The sudden removal of some companies from the insurance policy just before their defaults!

The massive Dubai companies’ defaults took place in February-March 2013. In the case of three specific defaulters, Italian Gold FZE, Al Mufied Jewellery FZC – which both had been on these policies for many years – and Al Alam Jewellery FZE, these names were stricken off the policy just a year earlier, at the policy renewal time for the 2011-2012 period.

How can Winsome claim that some of these defaulters are genuine third parties if in its duly signed insurance proposals these companies were listed as group owned or associated firms? What led them to decide to strike them off the policies just when the purchases on which the companies eventually were to default were in fact made? Just “coincidence”? And, beyond that, did anyone check on the insurance policies of the “newly set up” companies?

 

Not a sane, honest, decent businessman would run a business in the tens or hundreds of millions of dollars without insurance. Unless, of course, the gold and jewelry, upon receipt, is immediately handed over to another party. Then why waste money on insurance?

 

It will not be very difficult for law enforcement authorities to put their hands on the Jewellery Block Policies from Driesassur Insurance Brokers – and possibly others – and it may well become a “game changer” in the investigation.

 

Sonia Mehta Served as Director of Al Alam Jewellery

Let’s take a closer look. According to documents originating from the Canara Bank, the Punjab National Bank and other defrauded banks, Al Alam Jewellery, which is registered in the Ras Al Khaima Free Zone, has as sole shareholder a Bahamas company called Herald International Limited (HL). Al Alam was founded in 2010. Mrs. Sonia Mehta was one of the directors of the company. Moreover, Rajen Farikh and Dilip Thakkar, mentioned in documents as former shareholders (and founding subscribers) of Winsome, also served as directors of Herald International. The fact that Al Alam appears as a group company in Su-Raj Diamond’s (Winsome’s) block policy provides important additional confirmation on Al Alam’s status. Al Alam defaulted on $171,218,757 payments due on March 21, 2013. Based on the insurance policy, it was a Winsome Group company.

 

DIB is in the process of gathering more information on Al Alam’s default of $171,218,757. When, some time ago, we checked with the Company Registrar of the Bahamas, we were informed that the company was dissolved. But since then the offshore company data leaks, better known as the “Panama Papers”, were released. From this it appears that Herald International Ltd., a company established on July 31, 1992, was in fact dissolved and liquidated on December 31, 2012 – just a few months before the default.

 

Thus when the default occurred, Al Alam no longer had a mother company... It had become an orphan.

At the time the company was dissolved, it had four shareholders, three of them trusts or companies of which the natural beneficial owners are unknown. However, there is one natural person who appears as shareholder - Salman Lufti Ali Hussain Alharmouzi. He is a principal in a well-known legal firm in Dubai. He may be able to shed some more light on the default Al Alam, provided that the Canara Bank’s documentation is correct.

 

According to the records of the Sharjah Federal Court of First Instance in the UAE, Italian Gold defaulted on $142,221,327 in payments, which had a payment due on March 21, 2013. Meanwhile, Al Mufied Jewellery defaulted on a $15,707,073 debt, which came due on February 6, 2013. These three “erstwhile” Winsome Group companies had been suspiciously removed from the Winsome insurance policy just ahead of its mysterious default to the tune of $329,147,157.

 

 Click here to read the full DIB story.