Mumbai: A diamond jewellery firm in Hong Kong and Bangkok has gone bankrupt and defaulted on payment to the tune of Rs 350 crore to diamantaires in Surat and Mumbai, reports The Times Of India. The poor financial condition of two other firms in Bangkok has added to the worries of these diamantaires, who were hoping to reap huge profits in the upcoming Diwali festival.

Indian diamantaires from Surat and Mumbai, who supply polished diamonds to their buyers in Hong Kong and Bangkok have begun to make frantic inquiries after trade alerts and seeing messages about their clients’ poor financial condition on social media.

Industry sources in Hong Kong said polished diamond traders could face huge losses due to the Hong Kong-based diamond jewellery company going bust.

Sources said a purchase manager of a big company in Bangkok was arrested after some Indian suppliers lodged a cheating complaint against his firm a few days ago when it defaulted on Rs 10 crore payment.

Talking to TOI over phone from Hong Kong, a diamantaire said, “Traders in Hong Kong and our suppliers in Surat are worried over bankruptcy of jewellery companies here. The sum involved is very huge and many suppliers from Surat and Mumbai may suffer huge losses ahead of the Diwali festival. Most of the polished diamonds imported by China are from Hong Kong and the trade is in the hands of Gujarati diamantaires.”

India exports $28 billion worth of polished diamonds every year out of which nearly $9.5 billion goes to Hong Kong.

A DTC sightholder in Mumbai said, “Many jewellery companies in China and Japan have defaulted on bank loans, while a few in Hong Kong and Bangkok are facing financial trouble. This is due to the economic downturn in Chinese economy.”

Gems and Jewellery Exports Promotion Council (GJEPC) regional chairman Dinesh Navadia told TOI, “We are gathering details from Hong Kong and Bangkok about reports that a diamond jewellery company has become bankrupt. It is bad news for diamond exporters from Surat and Mumbai.”