Raids across more than a dozen properties around the Belgian diamond enclave of Antwerp seized roughly €50 million ($55 million) of the precious stones in an attempt to recover debts tied to the collapse of one of the country’s largest traders.
(Bloomberg) — Raids across more than a dozen properties around the Belgian diamond enclave of Antwerp seized roughly €50 million ($55 million) of the precious stones in an attempt to recover debts tied to the collapse of one of the country’s largest traders.
The raids were conducted at offices and private houses last month in a bid to recover debts once owed by Eurostar Diamond Traders NV to Standard Chartered Plc, people familiar with the matter said, asking not to be identified because the matter is private. A Carlyle Group Inc.-backed fund, which acquired the claims from the UK bank as part of its distressed debt business, worked with Grant Thornton on the asset recovery.
Eurostar, once one of the biggest buyers of rough diamonds, collapsed into bankruptcy in 2019 after borrowing heavily from Standard Chartered. The bank ran an ill-fated venture offering trade finance to diamond dealers that left it facing losses of some $400 million. A public hearing in Antwerp is scheduled for Thursday.
Eurostar was founded in the late 1970s by Kaushik Mehta. He didn’t respond to LinkedIn messages seeking comment. Representatives for Carlyle, Grant Thornton and Standard Chartered declined to comment.
Fresh from the global financial crisis, Standard Chartered spotted an opportunity to lend to the so-called diamond midstream, where mostly family-run businesses buy rough stones from miners like De Beers before cutting and polishing them into the sort of stones sold in jewelry shops.
Standard Chartered quickly built a $3 billion loan book to the industry, with Eurostar becoming one of its biggest clients. At the time, Eurostar was one of De Beers’ 80-or-so handpicked customers.
–With assistance from April Roach, Stephanie Bodoni and Ben Scent.
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