The Indian diamond industry faces a crisis as a Bangkok-Hong Kong diamond firm’s sudden bankruptcy leaves over 150 Surat and Mumbai companies reeling with unpaid debts totaling a staggering $7.8 million. The unnamed firm, now defunct, has vanished with creditors’ funds, throwing the businesses into financial turmoil.
The nightmare began when suppliers learned of the bankruptcy, only to discover the company had no inventory to cover its debts. Despite claiming $1.7 million in stock, nothing remained for creditors. To their further horror, a hidden $6 million debt emerged, dimming hopes of full recovery for affected companies, many of which are small and vulnerable.
This blow comes at a critical time for the already struggling Surat diamond industry, grappling with a global slowdown, rising rough diamond prices, and lab-grown diamond competition. The incident has shattered confidence and exacerbated financial strain.
Concerns regarding transparency and accountability in the diamond trade have also surfaced. Questions linger about the company’s financial practices and potential foul play. The Surat Diamond Association demands a thorough investigation to shed light on the matter and protect the industry’s future.
With millions trapped and businesses facing an uncertain future, the diamond industry braces for the ripple effects of this shocking bankruptcy. The investigation’s outcome and the fate of the affected companies will be closely watched, raising concerns about the industry’s resilience and potential reform needs.
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