RAPAPORT... ABN Amro had Belgium authorities seal the safes of Arjav Diamonds in Antwerp after negotiations failed regarding the diamond company’s $154 million debt. Arjav Diamonds is filing a counter claim against the bank for $230 million for damages incurred to the group. Court appearances are expected this Thursday.
“We have a commercial dispute with ABN Amro... A large variety of abuses spread over many years by ABN Amro have inflicted substantial financial damages to the Arjav group,” Ashit Mehta, a director of Arjav Diamonds told Rapaport News. “Fortunately, the profitability and viability of the diamond business has enabled Arjav to absorb these losses. Liquidity and equity of Arjav Diamonds today is solid.”
Mehta did not disclose the value of the goods that were sealed but he stressed that the bank’s action affected only the company’s safes in Antwerp and that the goods are still in Arjav’s possession.
Mehta reported that Arjav’s total bank debt in Belgium amounted to $385 million among ABN Amro, Standard Charter Bank, Bank of India, ICICI Bank and the State Bank of India. He said that the company’s dispute is only with ABN Amro. The four other banks have reportedly requested a meeting with ABN Amro.
He also claimed that Ernst & Young, acting on behalf of ABN Amro, has since forwarded letters to Arjav’s clients requesting that they make payments directly to ABN Amro, but noted that most of the company’s receivables have already been paid.
ABN Amro does not comment on relationship with individual clients. “This is a case between Arjav and the bank so we cannot provide any further information given the client-bank confidentiality to be expected from us,” a spokesperson for the bank stated. The case is an isolated situation and has no effect on ABN Amro’s position in the diamond industry or its attitude toward the market, according to the person.
Arjav Diamonds is one of Antwerp’s largest diamond manufacturing and trading companies and has a De Beers London sight in addition to buying rough from ALROSA, Harry Winston and BHP Billiton.
ABN Amro is one of the primary lending institutions serving the diamond trade, with a presence in most key diamond centers, including in Antwerp, Dubai, New York, Botswana, Hong Kong and Mumbai.
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