crore by the first quarter of 2012.

The credit was given to three group companies: Rs 4,366 crore to Winsome Diamond & Jewellers, Rs 1,932 crore to Forever Precious Diamond and Jewellery and Rs 283 crore to Suraj Diamonds.

According to the Economic Times, Indian banks had issued standby letters of credit (SBLC in banking parlance) similar to guarantees in favour of international bullion banks like Standard of South Africa, Standard Chartered London and Scotiabank, which were supplying gold to Winsome Group. As the Economic Times points out, “the arrangement was simple: if Winsome failed to pay the bullion banks, Indian banks would step in to pay for the gold consignment”.

As all the loans were grounded, within months Jatin Mehta resigned from the company as director. Mehta first resigned fromForever Precious Diamond and Jewellery on August 13, 2012 and from Winsome Diamonds and Jewellery, the flagship company, on November 9, 2012.

Mehta claims that the company had failed to pay because Winsome’s customers – UAE jewellers – were hit by derivatives losses and were unable to pay Winsome. In turn, Winsome Diamonds failed to repay the loans to various Indian banks.

From mid-2013, the group started defaulting on loans, and in October that year, banks declared the group a willful defaulter.

In early 2014, the banks knocked on the door of CBI. Both the CBI and the Economic Offence Wing (EOW) of Mumbai police raided Winsome’s offices. According to multiple sources within Indian banking circles, after this point the investigation slowed down. This coincided, multiple senior banking officials say, with