Lenders obtain court notices against diamond house Shrenuj & Company

Shrenuj & Company, the 100-year-old diamond house which is also one of the largest in the trade, has landed into trouble because the lender banks have tightened their grip on the four-generation old group.

The lending banks, with a combined exposure of around $450 million, have formed a consortium to obtain court order which would allow them to repossess the company’s diamond inventory, while also restricting the promoters’ travel. The consortium is lead by Bank of India, and includes ICICI Bank, Punjab National Bank, State Bank of Patiala, Standard Chartered bank and Andhra Bank amongst others.

The orders have been issued by the Debt Recovery Tribunal. As per the orders, chairman and MD Shreyas Doshi and group executive director Vishal Doshi are forbidden from travelling outside India without court’s prior permission.

The reason behind the troubles of Shrenuj & Company could be cited to the slowdown in the diamond industry and the failure of its international diversification in Africa.

Other than obtaining court orders, banks have also declared some of the company’s accounts as sub-standard, which means that the interest or principal has remained unpaid for at least a quarter.

While the last quarter of 2015 saw Shrenuj & Company registering a net loss of Rs 4.9 crore, it widened to Rs 38.32 crore in the first quarter of 2016. However, the company had registered a net profit of Rs 2.5 crore in the last quarter of 2015.

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