India focuses on fighting fraud

Joshua Freedman

India has beefed up its diamond disciplinary capabilities to put a stop to bankrupt traders setting up new companies to escape debts and curb other fraudulent activities.The new Trade Disciplinary Committee will have more power to target scams than India’s existing diamond trade organizations, according to Sanjay Kothari, the convener of the new panel. It will also have increased ability to ban members from Mumbai’s Bharat Diamond Bourse (BDB).

At present, the Gem & Jewellery Export Promotion Council (GJEPC), the BDB and the Mumbai Diamond Merchants’ Association (MDMA) have their own separate arbitration processes. This means each organization can only bring its own members to task. In addition, the Indian legal system struggles to deal appropriately with ethical breaches in the trade, Kothari claimed.

These realities mean a trader can often go bust or mislead a bank and then open a new, outwardly clean business and get away unpunished.

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Source Rapaport