Bangkok-Hong Kong diamond firm bankrupts 150 Surat and Mumbai diamond companies for $7.8 million

Surat : Unpaid dues and frozen cash for more than 150 firms in Surat and Mumbai were left behind when a diamond company located in Bangkok and Hong Kong filed bankruptcy, sending shockwaves across the Indian diamond sector.

The unnamed firm had a whopping $7.8 million in debt when it filed for bankruptcy. The terrible effect is particularly felt in Surat, where over 150 diamond enterprises, both large and small, are now fighting to recoup their debts from the defunct corporation.

Unconfirmed sources revealed that the company in question is operating business as Prime Diam (HK) Limited in Hong Kong, while it is Prime Gems Thai Co. Ltd in Bangkok.

The horror started when suppliers of the now-defunct firm found out about the bankruptcy. It turned out that their greatest worries were correct; the business had run out of merchandise to pay off the obligations. Creditors did not have access to the $1.7 million worth of items that the firm claimed to have in store when it filed for bankruptcy.

Unfortunately, the situation was worsened when the firm disclosed an enormous $6 million in debt, significantly reducing the prospects of complete recovery for the impacted businesses in Surat. This is a major cause for alarm since a large number of these businesses fall into the “small and medium-sized enterprise” category, which leaves them very susceptible to financial setbacks.

The revelation has caused the already troubled Surat diamond sector to tremble in fear. A worldwide economic slump, increased pricing of raw diamonds, and more competition from lab-grown diamonds are just a few of the recent problems that the sector has had to face. There is already a lot of financial pressure, and this new news has severely damaged trust.

Concerns over the diamond trade’s lack of accountability and openness have been heightened by this episode. The company’s accounting methods and the likelihood of wrongdoing are now under scrutiny. An exhaustive probe of the incident has been demanded by the Surat Diamond Association, the highest authority in the city pertaining to the diamond trade.