Jatin Mehta’s Winsome Diamond, Forever Precious Jewellery now under liquidation

Jatin Mehta-owned Winsome Diamond and Jewellery Ltd, an exporter of polished diamond, and Forever Precious Jewellery and Diamonds, designer and manufacturer of diamond jewellery, have been ordered to be liquidated after the insolvency proceeding against the two companies failed to evoke interest from any bidders.

The National Company Law Tribunal (NCLT) on 1 September 2020 gave its nod for liquidation of the corporate debtors, which together owed Rs 8,296 crore to financial creditors. Insolvency professional Amit Gupta has been appointed as the liquidator for both the companies.

The resolution process against Winsome Diamond and Jewellery and Forever Precious Jewellery and Diamonds was initiated by Ramesh Mehta in February 2018. Ramesh Mehta had provided polishing and diamond cutting services to Winsome Diamond in 2012-13 against which it raised an invoice of Rs 29.4 lakh. Out of the dues amount of Rs 29.4 lakh, the corporate debtor paid only Rs 11.9 lakh crore and the rest of the Rs 17.50 lakh remained unpaid till the time of filing of insolvency application.

Anshuman Chaturvedi, the resolution professional, had invited bids for the company in July 2018. However, no resolution applicants came forward on the last date of submission of EoI on 23 July 2020. Thereafter, the resolution professional sought the approval of the Committee of Creditors (CoC) for liquidation of the firm, which the CoC approved in August 2018.

However, suspended management of Winsome Diamond and Forever Precious Jewellery raised objection against the CoC’s decision to liquidate the company citing that it is a going concern and that the CoC did not exhaust the 270 day limit before giving its nod for liquidation.

However, the NCLT did not find merit in these objections.  The adjudicating authority also observed that the cases of money laundering against promoters of Winsome Diamond and Jewellery Ltd in Bombay High Court will not have any bearings on the liquidation process, and hence it approved the company’s liquidation.

Jatin Mehta, the former Managing Director of the company, is alleged to have diverted around Rs 7,000 crore worth of loan taken from a consortium of banks including Standard Chartered Bank and Punjab National Bank. Jatin Mehta has escaped the country.