Who Is Jatin Mehta?

The Winsome Diamond company owned by Jatin Mehta is ranked as India’s third-largest defaulting company, behind Kingfisher Airlines and Punjab National Bank defaulter Nirav Modi. In the Nirav Modi scam, investigation agencies were able to uncover properties valued at over 6,000 crores, but there were no leads in the Winsome Diamond case.

There was no trace left behind by the family of Winsome Diamond. It has been reported that Mehta fled the country with his wife in 2013 and acquired citizenship in St Kitts and Nevis the same year. Jatin Mehta has been accused in more than a dozen cases by the CBI.

Jatin Mehta Early Life

Since his family has been involved in the diamond industry since the 1960s, Jatin Mehta developed a passion for all things related to diamonds at an early age.

Following high school studies at Mumbai’s Hill Grange High School, Mehta completed his studies at Mumbai’s Hassaram Rijhumal College of Commerce and Economics, where he earned a Bachelor of Commerce degree. Combined with a natural aptitude for trade, Mehta naturally gravitated toward the diamond industry.

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Jatin Mehta Career

Founder of India’s first public diamond trading company, Su-Raj Diamonds Limited, Jatin Mehta entered the diamond business in 1985. He gained a reputation as an industry leader after working in this company for nearly fourteen years.

He conducted his business transparently and repaid all his loans when they were due. When he ran Su-Raj Diamonds, Mehta won numerous awards, such as Diamantaire of the Year and certificates of merit, as well as recognition as the country’s largest exporter of cut and polished diamonds.

After his success at Su-Raj Diamonds, Mehta expanded his business to create Winsome Diamonds and Jewellery Limited and Forever Diamonds.  

Jatin Mehta Biography

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Jatin Mehta – Working Of Diamond Industry In Earlier Times

In the early 2000s, Mehta began exporting diamonds to the UAE through his company Winsome Diamonds. A company owned by Jatin Mehta imports uncut diamonds from abroad. Diamonds would then be cut, polished, and made into jewelry pieces, then the finished jewelry would be exported to customers in the UAE.

Mehta acquired gold for his jewelry business on credit from several international bullion banks, including Bank of Nova Scotia, Standard Bank PLC London, and Standard Chartered. Banks that deal with precious metals are typically termed bullion banks. Trading, clearing, physical metal distribution, and locating lenders and borrowers are some of their activities.

Mehta acquired the gold he needed for his jewelry business from international bullion banks.

There are, however, several procedures in place for international banking transactions, which guarantee neither party will be defrauded and that the contract will be fulfilled. The bullion banks will face a disadvantage if Jatin Mehta refuses to repay the amount they lent him. This is because they will not be able to find a man in a foreign location.

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Acquisition of letter of credit from Indian banks

A bullion bank requires that a company requesting gold financing submit a standby letter of credit from a domestic bank to avoid such circumstances. It is a guarantee in the sense that the domestic bank accepts responsibility for the loan. Defaulting companies are responsible for repaying existing debts. Defaulting companies are required to pay the entire gold amount themselves.

A bank will not provide a standby letter of credit to just anyone off the street. The process entails due diligence as well. Depending on the size of the transaction, the company applying for a letter of credit is required to keep some collateral with the bank.

Jatin Mehta was granted standby letters of credit from the Bank of Maharashtra, Canara Bank, Union Bank, and other Indian banks. A reputation for stability in the diamond industry paid off here for his hard-earned reputation. He had also built up an excellent credit score and a flawless repayment record for Winsome.

Jatin Mehta Scam

The flow of transactions in this line was smooth for years. Jatin Mehta’s business was carried out so flawlessly that the banks grew to trust him and kept increasing his line of credit. This arrangement worked smoothly until 2012.

Then, it abruptly broke down without warning. A default on Mehta’s payments occurred in November 2012. He claimed a group of 13 UAE buyers whose regular trades in derivatives and commodities caused him unforeseen losses.

Due to this state of affairs, he had not been paid for the jewelry supply. Mehta said he would be unable to pay for the gold he had taken from the bullion banks without incoming revenue.

The devastating situation of India Bank

The situation was devastating for the Indian banks that provided Jatin Mehta with a standby letter of credit. However, if he defaults on his payments, these banks would be responsible for clearing all his debts.

Mehta had defaulted on a large amount, as you can imagine. About 7,000 crores were owed by the Winsome group, which included Winsome, Forever, and Su-Raj. Repaying this amount was not an easy task and would severely damage the bank coffers in India.

Of course, repayment was not an option. Although penalized for the default, the Indian banks who were punished decided to investigate the case themselves.

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The Investigation

In the UAE, Jatin Mehta has mentioned that there are 13 individual buyers. However, the statement turned out to be inaccurate. A single person controlled all 13 companies. Furthermore, it was revealed that 10 of the 13 companies were created in 2012 alone.

A total of five of them were incorporated on the same day, June 25, 2012. They realized they had been duped once these facts were revealed. The UAE did not have buyers. So Jatin Mehta devised this elaborate scheme to defraud the Indian economy of a few thousand crores.

Why Did They Not Do Anything To Stop Jatin Mehta?

We need to recognize that these legal processes can take years to complete to comprehend that point entirely. So it is not a simple process.

The suspicions surrounding Jatin Mehta and his companies grew in 2013. A group of banks that were cheated out of 7,000 crores realized that they were dealing with a mastermind and contacted the Central Bureau of Investigation (CBI).

The CBI conducted investigations against Jatin Mehta for three years. Mumbai police also joined the study, and along with the CBI, they raided Mehta’s property and office. However, despite all their efforts, they were not able to develop a compelling case against Mehta.

The entire family of Jatin Mehta fled India before significant charges were filed. Their new home is Saint Kitts and Nevis, where they have settled down to begin their lives.

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The Probe

During this time, the CBI went on to declare Jatin Mehta to be a wilful defaulter in the case against him. Even though his company was not bankrupt and had the money with him, Mehta had intentionally chosen not to repay the money.

Jatin Mehta was investigated by the Enforcement Directorate (ED) in 2017. Unfortunately, the entire amount had been taken from government banks.

It was essentially the taxpayer’s money that Mehta had escaped with. Punjab National Bank has suffered the most significant loss out of these – an amount of more than Rs. 1,700 crore. Central Bank of India and IDBI Bank, among others, have suffered losses of Rs. 699 crores and Rs. 388 crores.

Mehta’s fate still hasn’t caught up to him. Mehta lives a posh life in the United States. Furthermore, he has launched new companies in the UK and Montenegro. The diamond business is still running, and he is still enjoying the benefits of exile from tax money.

Even some bank officials were involved in the fraud, according to an investigation. CBI and ED are joining forces to bring this willful defaulter to justice.

Similarities Between Jatin Mehta And Neerav Modi

Nirav Modi and Jatin Mehta share some similarities. Their hometowns are both Palanpur in Gujarat. Both are in the diamond business, and they have stolen thousands of crores from the Indian economy. Moreover, Punjab National Bank is the primary victim in both cases.