Banks to auction mortgaged assets to recover Winsome Diamonds dues

Company claims it is wrongly being treated as 'wilful defaulter'

Bankers to Winsome Diamonds & Jewellery have begun the process of selling its mortgaged assets to recover dues estimated at Rs 4,300 crore.

Government-owned Punjab National Bank (PNB), the largest lender, has already declared the company a wilful defaulter. In October 2014, Standard Chartered Bank, another key lender, had slapped a demand notice for recovery on behalf of the consortium of banks for dues of Rs 4,321 crore. It took symbolic possession of the mortgaged properties in February 2015.

PNB will conduct an electronic auction of properties next month. The reserve price for the 28 units put on auction is Rs 38 crore.

Winsome said it had contested its categorisation as “wilful defaulter”.   The decision of the banks to wrongfully declare it so, it said, was based mainly on an unsubstantiated report from Kroll, appointed by the consortium led by Standard Chartered. A copy of the Kroll report has not been made available to the company, it said, despite several requests.

Winsome said its customers (13 companies in Dubai) had defaulted on payment to company. It had filed suits against them for dues amounting to $1.2 billion. This amount was to be paid for goods exported by the company. The defaulting entities used the money to meet losses in trading on the international commodities market, it said, adding that a federal court in Sharjah was expected to consider reports in this regard and pass a final order.

Winsome reportedly had a net profit of RRs 413 crore in the quarter ended March, as against a net loss of Rs 132.6 crore in the same quarter a year before. Net loss was Rs 12.3 crore in the year ended March, as against a net loss of Rs 257.7 crore the previous year. Sales rose 83.9 per cent to Rs 4.7 crore in the year ended March, as against Rs 2.6 crore the previous year.