Banks look at Winsome's customers to recover dues

Exploring legal steps to bring back promoter to India from Dubai

Banks are exerting pressure to recover dues from Winsome Diamonds and Jewellery.

Winsome Diamonds owes Rs 6,800 crore to banks in India. The company had exported jewellery to a dozen firms, most of them in West Asia. These companies failed to make payments to Winsome Diamonds, which in turn led to it defaulting on loans from banks.

Read more from our special coverage on "WINSOME DIAMONDS AND JEWELLERY"

• Wilful defaulter Winsome resigned to banks decision on board nominee Tanwars continuation

The lending banks were investigating if these entities had any relations with Jatin Mehta, promoter of Winsome Diamonds, said a public sector bank executive.

They are exploring legal action to bring Mehta back to India from Dubai and remedies to make Winsome Diamonds' creditors pay their dues to the company.

The lenders were examining if they could lay claim on Mehta's ventures and business interests in Singapore, said another public sector bank executive.

The banks have taken a tough stand against Winsome Diamond's board, which recently asked their nominee, Satya Prakash Tanwar, to resign. Tanwar, a former State Bank of India executive, was inducted on Winsome Diamond's board in September 2013, but the company's directors sought his removal after he dismissed an audit report as "non­transparent and unacceptable".

"Since he made frivolous remarks about the company, which indicates he has started acting against the interests of the company, we sought Tanwar's resignation. Now, it is up to the banks to take a decision," said Harshad Udani, additional director and spokesperson of Winsome.

Tanwar defended his actions and ruled out resigning from the board. "India is a democratic country. Everybody is free to have an opinion. As long as I have not resigned, which I don't intend to, I am on the board as banks' nominee," he told Business Standard. "In fact, Standard Chartered, the fourth largest lender to Winsome after Punjab National Bank, has asked me to continue and hence, I am continuing."

Winsome promoter Mehta, who is based in Dubai, is said to have set up a subsidiary there to tap untapped potential in jewellery sector in West Asia and exported jewellery from India to many customers in the region.

Sources said Tanwar raised questions on the existence of the subsidiary when the company promoter himself had interest in setting up a separate business.