How Standard Chartered Lost $400 Million on Risky Diamond Debt - Bloomberg:
"Standard Chartered Plc’s plunge into the risky business of diamond lending began eight years ago with a cocktail party at its London headquarters.
Maurice Tempelsman, longtime escort of Jackie Kennedy and head of one of the biggest U.S. diamond companies, was there. So was diamantaire Dilip Mehta, who had been made a baron by the king of Belgium, and other luminaries from the industry of middlemen who buy rough stones from mining companies like De Beers, polish them and sell to jewelers and retailers. Flitting among the guests was the man who made it possible, Kishore Lall, recently hired to run the bank’s diamond-lending business.
The cost of that ill-fated venture is still being tallied. Since around 2013, Standard Chartered has accumulated about $400 million in actual and provisioned losses on a portfolio of loans to these diamantaires that once reached $3 billion, according to a bank official familiar with the matter. Including lending to diamond miners and retailers, the bank’s total exposure to the gems was $4.5 billion. Chief Executive Officer Bill Winters, who took over two years ago, is still trying to clean up the mess."
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