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RAPAPORT... Arjav Diamonds' lawsuit against ABN Amro could ultimately cost the bank more than $571 million in legal fees and lost business, according to an internal risk document obtained by the French language newspaper L'Echo. The loss estimate was quickly dismissed by ABN Amro as outdated and unrealistic. Arjav and ABN Amro have a commercial dispute underway in Belgian court, which began in December 2012, after the bank sealed Arjav's vaults. L'Echo cited an ABN Amro document titled ''Court case scenario'' allegedly showing the bank provided for $110 million write-down provision from the Arjav lawsuit in addition to other legal expenses. The case could also cost the bank its credibility in India, where it has applied to operate and that loss of revenue could reach another $180 million, according to the newspaper. Should the bank lose its role as the advisor for the Blue Star/Arjav consortium, the document allegedly showed another $30 million loss. However, Jeroen van Maarschalkenweerd, of the press office at ABN Amro, explained to Rapaport News, ''The figures listed in the article published in L’Echo are not realistic at all and are out-dated. Actually, this is the result of what banks do all the time, assessing risks by elaborating scenarios and cases studies. ''The scenario in question was made back in September 2012, which was way before we knew all the facts regarding the Arjav dispute. And even at that time, this was already considered as an unrealistic scenario - what we call a worst case scenario,'' van Maarschalkenweerd said. ''Consequently, the possibility of it really happening was highly improbable. This is why we were very surprised when it was published, wondering how this could be of any value at all to the media. You must understand that we were contacted by L’Echo and also by its Flemish counterpart, De Tijd, and that we told them both the same thing. L’Echo published it, whereas De Tijd didn’t. In the end of the day, this article is totally irrelevant to us.'' The document revealed the potential loss of Indian clients too, which was assessed at $150 million, in addition to litigation brought by diamantaires in the neighborhood of $100 million plus other legal costs.
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