|A recent article in India's The Economic Times reporting on the apparent financial difficulties of Indian diamond and jewelry manufacturing company Shrenuj & Co., has prompted a heated response by the company's Chairman Shreyas Doshi in a letter to the Bombay Stock Exchange and the National Stock Exchange of India.
The news source reports that "Shrenuj has run into trouble...", and further reports that the company's banks, owed around US$450 million, have obtained a court order to seize the company's inventory of diamonds and prevent travel of the company's top management outside of India without court permission.
The publicly listed company admits that one of its subsidiaries, Shrenuj Far East Limited, based in Hong Kong, which has a credit line of US$15 million with ICICI Bank Limited, has been placed in Receivership, with the ICICI's Hong Kong branch as Receiver. In his letter, Doshi asserts that, "[Shrenuj Far East Limited] forfeited all its assets to the Receiver and shared all the information with the Receiver on best effort basis." And further states that ICICI Bank had approached the Debt Recovery Tribunal (DRT) in India and sought an ex-parte order to attach all the company's inventories in India and place restrictions on the international travel of the company's top management.
While the Economic Times article ambiguously links the DRT decision to the lending consortium - Bank of India, ICICI Bank, Punjab National Bank, State Bank of Patiala, Standard Chartered bank and Andhra Bank, and a number of others, Doshi says the action was undertaken unilaterally by ICICI Bank.Doshi further clarifies that "...this action has reference to only one of the several banks lending to one of the smaller subsidiaries of the Company, and the operations of the Shrenuj Group or its listed flagship entity are not directly affected by this unilateral action by ICICI Bank Limited," adding that, "The Company is in the process of seeking legal opinion to challenge this ex-parte decision of DRT-III and take remedial measures."