Surat: A select few diamond firms and rough dealers, including a De Beers sightholder, in the world’s largest diamond cutting and polishing centre in Surat supplied low-quality natural and lab-grown diamonds to jewellery manufacturing units owned by billionaire Nirav Modi in Surat Special Economic Zone (SurSEZ).The low-quality diamonds and lab-grown diamonds were supplied in exchange for rough diamonds imported by Modi’s Firestar Diamonds Ltd from Russia and Australia in his jewellery units located SurSEZ. Rough diamonds imported in the SEZ were allegedly over-invoiced to get more funds from banks. On the other hand, the low-quality diamonds imported from Surat units were set in the jewellery sold to export markets in Hong Kong and the UAE.Modi’s Firestar Diamond Ltd is a client of world’s largest diamond mining company Alrosa and a sole distributor of pink diamonds mined in Australia’s Argyle mine in South Asia. It is learnt that Modi imported rough diamonds in the units located in SurSEZ and that the same were diverted legally to the domestic tariff area (DTA) in Surat for cutting and polishing. In return, the units in Surat exported low quality natural and lab-grown diamonds, which were later set in the Modi brand jewellery manufactured in SurSEZ.During the raid by directorate of revenue intelligence (DRI) on Modi’s jewellery units in SurSEZ in August 2015, it was revealed that imported diamonds were being diverted to domestic market, while cheaper low-value diamonds used to make jewellery for export to Hong Kong and the UAE.Diamond industry leader Kirti Shah told TOI, “It is learnt that the enforcement directorate (ED) has seized jewellery and diamonds to the tune of Rs 5,700 crore from Modi’s facilities. The ED should seek assistance of expert valuers from the industry to ascertain that the diamonds are not lab-grown in nature. If so, then the value of the jewellery and diamond will come down drastically to just a few hundred crores of rupees.”Shah added, “A few diamond firms and traders in Surat have earned handsome profits dealing with Modi. Without these select few diamantaires here, this huge scam would not have been possible. Since Modi owned a reputed international brand, even lab-grown diamonds set in the jewellery were sold as natural diamond jewellery. There is no machine in the world that can detect whether diamonds are natural or lab-grown, once they have been studded in the jewellery.”India is the largest diamond manufacturing centre with about 70 per cent of the world’s rough diamonds cut in this country. Indian companies successfully cooperate with ALROSA under long-term supply contracts as well as in the format of tenders and spot sales. In 2014, ALROSA’s rough diamond sales to Indian companies exceeded $2.3 billion; direct supplies to India amounted to $700 million.A diamond industry leader said, “Gitanjali Gems’ Mehul Choksi had a contract of processing 7 lakh lab-grown diamonds per annum with a manufacturing unit located in Varachha. Since Choksi and Modi owned international jewellery brands, they were studding lab-grown and low-quality diamonds in the jewellery articles.”Even six days after multi-crore bank scam, no Surat diamantaires has made an uproar about losing money or diamonds because of Modi’s wrongdoings.Surat Diamond Association’s former president Dinesh Navadiya said, “Not a single diamond manufacturer or trader has approached SDA with a complaint of having lost money in the Modi scam.”

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