On 13 June 2022 in the Surat High Court, Mr. Jatin Mehta filed a claim for US$5 billion against De Beers, Standard Chartered Bank and Kroll.
The claim is based upon evidence which Mr. Mehta’s asserts shows the co-defendants conspired over a number of years to destroy his business and the reputations of him and his family. The suit explains the targets of the conspirators were Winsome Diamonds (“Winsome”) and Forever Diamonds (“Forever”) which were at the material time the principal corporate vehicles of Mr. Mehta.
Jatin Mehta and his family have been synonymous with the diamond industry in India for decades. Over the years the family has developed a reputation of being at the forefront of technological and workplace innovation which others have then followed. The suit makes clear that it was the Mehta family’s pivot towards Laboratory Grown Diamonds (“LGD”) led by Mr. Mehta’s wife, Sonia, that lies at the heart of the conspiracy against him. The suit makes clear that the rapid growth of the quality, quantity and consumer acceptance of LGD, a trend pioneered by Mr. Mehta, was viewed by the De Beers, the Earth Mined Diamond (“EMD”) giant as posing an existential threat to its fundamental business model.
Mr. Mehta’s suit claims the harassment commenced once his wife, in collaboration with Professor Misra, a leading physicist from the world-renowned India Institute of Technology, Mumbai, established her own LGD manufacturing facility in Singapore in 2005. Despite the efforts to malign Professor Misra, the suit says Indian law enforcement found no evidence of wrongdoing and closed its investigation in December 2009.
After this initial failure to harm Mr. Mehta and his family’s business, the suit moves on to claim that very damaging allegations were made in 2012 when, the De Beers monthly “Trade Alert”, issued a warning that a certain distributor of LGD, in Antwerp, Belgium, was attempting to pass off LGD as EMD. The Trade Alert resulted in a number of other allegations including one article which went on to name the “source” as being a company closely linked to Mr. Mehta.
The reputational damage was immediate and significant, as it was intended to be, according to Mr. Mehta. Following the Antwerp allegations Mr. Mehta stepped down from the boards of Winsome and Forever to devote the time required to fight the direct challenge to his professional and personal standing. In 2018 after a lengthy and technically complex investigation, however, the Public Prosecutor asked the Antwerp Court of First Instance to dismiss the case as no evidence of wrongdoing on the part of Mr. Mehta or his companies was found.
In 2013 the third attempt to cripple Mehta-linked businesses, according to the suit, was launched. The suit alleges all three co-defendants conspired to ruin Mr. Mehta. Thirteen companies based in the United Arab Emirates defaulted on over US$1 billion of obligations to Winsome. According to an investigation in the UAE, the companies were found to be linked to one local who, due to his speculation in foreign exchange trading and financial derivatives accumulated massive losses of over US$1 billion. Because the 13 companies failed to pay Winsome and Forever, they in turn defaulted on Letters of Credit amounting to over US$1.2 billion. Those letters of credit had been issued by a consortium of banks (which included Standard Chartered) to support the importation of gold that Winsome and Forever used to make the gold and diamond jewelry which was sold to the UAE companies.
Winsome and Forever attempted to put together a restructuring of the debt, however, in the suit Mr. Mehta claims that it soon became obvious that Standard Chartered was only interested in getting hold of the Mehta family’s Singapore LGD facility – going as far as to make it crystal clear to Mr. Mehta, according to the suit, that, “all his problems will go away” if he were to handover the Singapore LGD facility as part of any restructuring. The suit alleges that pressure on Mr. Mehta was increased when Kroll was hired (without the agreement of Mr. Mehta) as the banking consortium’s forensic experts. In an August 2013 report, according to the suit, Kroll reached highly speculative and damaging conclusions which alleged that the losses incurred by the UAE distributors were fictious and Mr. Mehta was fully aware of this. Even though the allegations were strongly denied by Mr. Mehta (and not supported by other local investigations) the suit alleges the co-defendants succeeded, in destroying the Winsome-led restructuring initiative. Winsome and Forever were subsequently liquidated in September 2020.
