Diamonds: Investigation into bankruptcy of former industry number one
Share article:
Share article:

Diamonds: Investigation into bankruptcy of former industry number one

Diamonds are forever. Diamond dealers, not so much. © Swamibu/Wikimedia

The Antwerp prosecutor has started an investigation into the mysterious bankruptcy of the company that formerly stood in first place among the city’s diamond dealers.

Eurostar Diamond Traders, owned by the family of 71-year-old Kaushik Mehta, was at one point the diamond city’s major trader in both rough and cut diamonds. Then suddenly in 2019 the business was declared bankrupt, despite having posted recent results of €1.6 and €2.5 billion.

It turned out the company had a mountain of debt in the hundreds of millions, in particular to the banks ABN AMRO and Standard Chartered. The only assets left were some rough and cut diamonds, and the company’s prestigious headquarters in the heart of the Antwerp diamond district.

Those assets will be sold off by the administrators, who hope to get just over €1.5 million for the corporate HQ.

In the meantime an investigation has been started into possible mismanagement surrounding the bankruptcy, in particular the role of ABN AMRO.

In a development which may or may not be of interest to investigators, the bank this week agreed to pay a settlement of €480 million for malpractice in the fight against money-laundering.

In 2008, ABN AMRO set up a post-box construction for Eurostar Diamond Traders in Jersey. The company, United Vision Limited, had a starting capital of £2, and shared its address with thousands of other phantom companies.

Then, according to the lawyer for the Mehta family, ABN AMRO in 2012 decided to pull out of diamond financing, leaving Eurostar with a debt of about half a billion euros. In order to build down that debt, the bank installed a CEO of its own, with the result that the debt had come down by some €350 million by 2018.

That alone is in question, since such a rapid paying off of debt should have led the bank to doubt the stability of the company. Investigators will also look into possible infractions on the laws on banks taking part in inventory financing of diamonds, as well as trading in diamonds, which requires a licence from the economy ministry.

Alan Hope
The Brussels Times

Latest news

More politicians than ordinary citizens at the Conference on the Future of Europe
The second Plenary of the Conference took place on Saturday in the European Parliament in Strasbourg and discussed the contributions from the ...
Belgium’s Consultative Committee to meet on Tuesday
The next meeting of Belgium's Consultative Committee, scheduled for Friday, has been brought forward to Tuesday at 4:30 PM, according to local media ...
Coca-Cola, Pepsi and Unilever are world’s biggest plastic polluters
Coca-Cola, Pepsi, and Unilever were found to be the world's biggest polluters of plastic in a report published by Branded on Monday. Over 11,000 ...
Four men charged with illegally buying thousands of live ducks to hunt on private land
Four Belgian men will appear in court on Monday facing charges related to the purchase of thousands of ducks, which were then released into a private ...
More wolf attacks: 15 deer killed at family resort over the weekend
Fifteen deer were killed by wolves in the Belgian province of Limburg this weekend, between Saturday night and Sunday morning. The deer were ...
Cost of breast cancer still too high for many patients
Breast cancer still carries too high a cost for patients when one in nine women in Belgium will face the disease before reaching 75, according to a ...
Gare Maritime: Brussels’ most exciting new architectural project
A generation ago, the Gare Maritime in the Tour & Taxis industrial site was an abandoned wasteland. It is now a model for urban renewal and ...
Belgium in Brief: Rules For A Fourth Wave
It's the news that nobody wants to hear, but here we go again. Belgium’s council of ministers will hold an emergency meeting on Monday to discuss ...
Belgian grandparents to walk across Scotland for COP26
A group of Belgian grandparents has set off on a 100 km hike that will take them from Belgium to the Scottish city of Glasgow, just ahead of the ...
Rise in fuel prices will bring Belgian State €547 million in tax, say Workers Party
The sharp rise in fuel prices that have been felt across the continent will bring an additional €547 million to the Belgian State, the Workers' Party ...
Amid backlash, Brussels police chief promises to do better for sexual assault victims
After multiple rallies against sexual violence took place in Brussels last week, with victims offering testimony of poor treatment from police when ...
Person hit by train in Brussels
A person was hit by a train in the tunnel between Brussels North and Brussels Central at around 10:20 AM on Monday, railway network manager Infrabel ...