The UK’s Standard Chartered Bank (SCB) has filed a report with the Mumbai Police against Winsome group in the latest episode in a long running money laundering investigation.

According to Indian banks, Winsome is India’s second largest defaulter after Vijay Mallya’s Kingfisher Airlines.

Case history

Listed Indian company, Winsome Diamonds and Jewellery, along with group member, Forever, owe around US$1bn to 15 banks in India. SCB is leading the banks in their pursuit of payment from the group.

Winsome has been under investigation by the Indian authorities since January 2013 when 13 of its Dubai-based distributors failed to pay around US$750 million to the company.

All of the 13 Dubai-based clients that did not pay up were linked to one Jordanian national, Haytham Ali Salman Abu Obidah.

Bank action

These circumstances prompted four foreign banks led by SCB to claim bank guarantees worth around $600m.

The new SCB report follows an unsuccessful attempt by the bank two years ago to submit a report but the authorities rejected it.

In its new report, SCB says the authorities must pursue investigations and contemplate prosecution due to evidence of fraud.

Money laundering

Winsome has always said it would repay the banks, but the financial institutions appear unconvinced that this ever will happen.

In June, India’s Enforcement Directorate provisionally attached properties worth US$26 million of Winsome Diamonds and its subsidiaries under the Prevention of Money Laundering Act.