Originally Syndicated on August 12, 2023 @ 11:27 am
Rosy Blue Diamond is one of the world’s leading diamond traders, boasting a network of 12 offices spanning seven countries. These international locations include Belgium, Israel, Hong Kong, Japan, the United States, China, and Dubai. The esteemed ownership of the company rests in the hands of the Bhansali and Mehta families, with Russell Mehta, an Indian oligarch, diligently serving as the present Managing Director.
Table of Contents
Introduction
Who is the Owner of Rosy Blue?
The company’s origins trace back to its inception in 1960, when two Indian families, namely Arunkumar Mehta and his cousin Bhanuchandra Bhansali, laid the foundation. Embarking on a journey that spanned decades, the company established its headquarters in Antwerp, Belgium, during the 1970s. With a steadfast commitment to excellence, Rosy Blue Diamond Sales expanded its reach to encompass various diamond hubs worldwide.
Arunkumar Mehta and his cousin, Bhanuchandra Bhansali, established Rosy Blue in 1960, as written in active voice while preserving the original context. The Mehta family, one of the wealthiest families in India, now owns the business. The current chairman of Rosy Blue is Russell Arunbhai Mehta, the son of Arunkumar Mehta.
Here is a brief history of Rosy Blue:
- Arunkumar Mehta and Bhanuchandra Bhansali founded the company in Mumbai in 1960.
- 1969: The company becomes a stockholder of the Diamond Trading Company (DTC), the marketing arm of the De Beers Group.
- 1970s: Rosy Blue expands its operations to Belgium and Israel.
- 1980s: The company expands its operations to the United States and the United Arab Emirates.
- 1990s: Rosy Blue becomes one of the world’s leading diamond manufacturers and traders.
- 2000s: Rosy Blue expands its operations to China and India.
- 2010s: Rosy Blue enters the retail market with the launch of its own chain of jewellery stores.
- 2020s: Rosy Blue continues to grow and expand its operations, despite the challenges of the COVID-19 pandemic.
Rosy Blue is now one of the world’s largest diamond manufacturers and traders. It has a presence in over 10 countries and employs over 10,000 people.
Mehta Family’s Presence in Black-Money Lists
The Mehtas, a distinguished Indian diamond business family, have consistently appeared on all black-money lists acquired by the government. Investigations have revealed these listings. These listings span various locations, including Liechtenstein, the British Virgin Islands, HSBC Geneva, and the Panama Papers. The Appleby records also make note of their presence.
Within the Appleby records, the prominent figures associated with the family are Dilip Mehta and his nephew, Russell Mehtta. Both hold significant positions within Rosy Blue, a globally recognized diamond enterprise.
Arun Mehta entrusted his youngest son, Dilip Mehta, with the responsibility of inaugurating Rosy Blue’s Antwerp division. His engagements span Belgium and Dubai.
Strategic Partnership with Leo Schachter
In a recent development, Rosy Blue reached an agreement last month. This agreement aimed to secure a minority stake in Leo Schachter, enhancing the efficiency of their diamond supply operations. This strategic collaboration will enable the two companies to leverage each other’s global infrastructure. It will result in the delivery of enhanced value to their clientele. The collaboration aims to utilize their combined strengths for mutual benefit. Ultimately, this partnership will lead to a more robust and efficient operation.
Leo Schachter emphasized that despite this arrangement, they will continue to function independently under the continued majority ownership of the Schachter family. The existing management team will remain at the helm of affairs, ensuring the continuity of their established operations.
Swiss Leaks
Harshad Ramniklal Mehta, an Indian billionaire, formerly held the position of chairman within the Rosy Blue Group, a prominent diamond trading and supply enterprise.
Back in 2011, Indian authorities initiated an investigation into Mehta and his affiliated companies on suspicion of failing to disclose offshore bank accounts located in Liechtenstein, as reported by the Indian Express. This inquiry by India’s tax office also encompassed searches within Mehta’s family-owned businesses, relating to an account with a value of approximately $44.5 million held at HSBC in Switzerland.
One of the offshore entities, named Regula, featured among a series of companies and trusts employed by Mehta and his extended family. These entities were part of a broader structure in conjunction with HSBC Private Bank in Switzerland, as indicated in internal documents acquired through the Swiss Leaks. The collective holdings of the family’s accounts amounted to $63.6 million during the period of 2006–2007, as evidenced by the documents.
Mehta asserted his non-resident status for tax purposes in relation to the Indian Express’s 2016 investigation into the Panama Papers. He is based in the United Arab Emirates. He clarified that the establishment of offshore companies wasn’t motivated by tax evasion, but rather by the desire to capitalize on favourable incorporation procedures, legal frameworks, and succession planning opportunities.
A spokesperson from Rosy Blue, when contacted by ICIJ, emphasized that there is no connection between Mehta and the company. Additionally, the spokesperson affirmed that Rosy Blue and its subsidiaries have no affiliations with Regula, Deutsche Bank, or previous inquiries involving offshore entities and accounts.
Sparkling Controversies Surrounding Rosy Blue and MD Russell
Over the years, Rosy Blue, a global diamond company, has become embroiled in several controversies. Here are some of the controversies related to it:
Senior Indian Congress Politician Anand Sharma said that in December 2015, when Russian President Vladimir Putin came to India, Indian Prime Minister Modi was personally present and helped facilitate the signing of Diamond purchase agreements between 12 diamond companies, mainly from Gujarat and Mumbai, and Al Roza of Russia”.
These companies also included Rosy Blue Group, which is being prosecuted for defrauding banks, and he asked, What does the prime minister have to say about the support that has been given to the promoters of Winsome Diamonds”.
Loan Default
In 2018, there were allegations that Rosy Blue had defaulted on a bank loan. However, the company issued a statement clarifying its non-default status on any bank loan. It also emphasized that it was not under prosecution in any default case.
False Reports of the Founder’s Arrest
In 2014, Belgian media incorrectly reported that Dubai authorities had detained Dilip Mehta, the founder of Rosy Blue. Rosy Blue Nevada fired back, stating that the reports were false.
Offshore Tax Probe
In 2020, each offshore tax probe was flagged and placed on the US radar as a component of a broader investigation in Brazil that exposed corruption at the state-owned oil company.
The owners of diamond conglomerate Rosy Blue, linked to various financial lists, are facing scrutiny again. Banks have raised concerns about their large number of transactions, leading to an investigation by US watchdog FinCEN.
Harshad Mehta, Rihen Mehta, Dilip Mehta, and their firms feature in Suspicious Activity Reports (SARs) filed by Standard Chartered Bank. These reports focus on intra-company transactions, with about $4.98 billion flagged between 2014-2016.
The scrutinized transactions involve activities like using loans to settle debts and unusual fund flows between group firms. These activities are linked to negative media coverage, Panama Papers offshore dealings, tax evasion allegations in Belgium, and a Brazil corruption case.
Dilip Mehta, Rosy Blue’s CEO, highlighted regular audits and no charges from FinCEN. Rihen Mehta clarified their separation from Rosy Blue in 2013 and emphasized their non-residency status.
In short, the Mehta family’s financial activities continue to be under scrutiny, but they deny wrongdoing.
Pandora Papers: Rosy Blue Diamond Offshore Restructuring
Offshore Network Revamp
The Pandora Papers have revealed that Rosy Blue, a major diamond-trading firm, restructured its offshore network following the Panama Papers exposé. These actions involve entities that are not tied to India or subject to Indian law, according to Dilip Mehta, the CEO of Rosy Blue in Belgium.
In previous offshore investigations, members of the Rosy Blue family were linked to deposits in HSBC Geneva Bank and named as beneficiaries of offshore companies in tax havens. The company’s involvement in offshore leaks dates back to the HSBC records in 2015 and continues up to the Pandora Papers detailing offshore investments until 2020.
Dilip Mehta’s Asiaciti Trust Records: PEP and High-Risk Designation
The records from Asiaciti Trust, Singapore, primarily pertain to Dilip Mehta, the youngest of the Mehta brothers and CEO of Rosy Blue in Belgium. He is classified as a Politically Exposed Person (PEP) and a “high-risk” client by Asiaciti due to his business in diamond trading and international trading locations.
Pandora Papers Unveil Trends
The Pandora Papers reveal a series of offshore company formations in tax havens like the Cook Islands and Guernsey. The company’s assets in tax havens were also restructured, particularly in 2017 after the Panama Papers came to light.
Emails from January 2017 indicate that the establishment of Elma’s structure was intended to move the PTC structure out of Singapore and transfer assets from previous Guernsey and Jersey Trusts. Asiaciti Trust and Dilip Mehta’s representatives spoke about selling a Rosy Blue company-owned property.
Dilip Mehta’s classification as a PEP “by association” is due to his brother’s role as the Honorary Consul of Armenia in Mumbai. Asiaciti also considers him “high risk” due to the nature of his diamond trading business and the countries he trades in.
In January 2018 emails, Asiaciti’s compliance teams found no negative media records for Dilip Mehta, although there was “adverse media” on his brother Harshad Mehta dating back to 2011.
Elma’s Structure: Asset Shifting and Communication
The Sparkle Trust and Company set up in 2017, has a structure similar to Elma’s entities. Dilip Mehta is the Economic Trustee, and Karl French is the enforcer and asset contributor.
Old Rosy Blue Trusts operating from Guernsey were administered by Asiaciti. The Veer Trust, established in 1999, names Dilip Mehta as the beneficiary and Settlor. Rosy Blue is the owner of Beech Settlement, which became a Guernsey corporation in 2004, and Elmas Hong Kong is its current trustee.
Dilip Mehta is the protector of Beech Settlement, and Russell Mehta’s son is the Settlor. Kilian Holdings Limited, a BVI company, lists Dilip Mehta and Viraj Russell Mehta as shareholders. A resolution dated March 4, 2020, appointed Dilip Mehta as Director.
Dilip Mehta clarified that he is a Belgian national and the matters discussed are not related to India or its laws. He emphasized that the restructuring aligns with international succession planning for individuals with assets across jurisdictions.
In conclusion, the Pandora Papers shed light on Rosy Blue’s offshore activities and restructuring efforts, with Dilip Mehta addressing the lack of Indian connection and compliance with laws.
The US freezes ₹215 crore of Indian diamond sellers amid alleged Russia links.
The US Office of Foreign Assets Control (OFAC) has targeted Indian jewellers’ offshore firms, freezing about $26 million (₹215 crores) in fund transfers over alleged connections with Russian diamond sources. This move has impacted Indian diamond houses’ UAE subsidiaries, halting dollar payments due to suspected ties with Russian miners and sanctioned entities. The Gem & Jewellery Export Promotion Council (GJEPC) is addressing the issue with India’s Ministry of Commerce and the UAE embassy. Discussions with G7 nations are planned, aiming to secure the diamond supply while respecting US interests. UAE authorities are also involved in resolving the payment issue with OFAC.
The Pandora Papers, leaked documents, show that Rosy Blue has restructured its offshore network after a previous expose in Panama. The company has formed offshore companies in tax havens such as the Cook Islands and Guernsey.
The allegations made by FinCen Files on Rosy Blue
FinCEN Files and Offshore Tax Probes
The FinCEN Files, which are based on Suspicious Activity Reports filed with the US government, flagged Rosy Blue in each offshore tax probe and put the company on the US radar. The controversy is part of a larger investigation into corruption at the state-owned oil company, Petrobras, in Brazil. The leaked documents detail the extent to which major banks have facilitated money laundering and add some fascinating detail to the mirror-trades affair.
It also stands by the recent allegations made against several diamond firms for defaulting on bank loans.
The company stated that it has not defaulted on any bank loans and is not facing any prosecution related to default cases.
Nirav Modi and Gitanjali Jewellers Scandal
The entire diamond industry has come under scrutiny following a billion-dollar scandal involving two prominent jewellery companies, Nirav Modi and Gitanjali Jewellers.
Anand Sharma accuses PM Modi of favouring private diamond firms over PSUs
Amidst growing controversies, political parties have accused various firms, with Rosy Blue responding to claims made by Anand Sharma of the Congress party. Sharma alleged that Prime Minister Narendra Modi facilitated diamond purchase agreements between Indian firms and Russia’s Al Roza Group.
Rosy Blue, Managing Director Russell Mehta (an Indian Oligarch), clarified that the group possesses a clean credit history without any defaults. He dismissed allegations of ongoing or past legal proceedings, emphasizing the company’s solid reputation within the diamond trading industry. Mehta deemed the claim of prosecution against Rosy Blue Group “false, groundless, damaging to reputation, and hence, refuted.”
Rosy Blue, a global diamond company, was flagged in each offshore tax probe and put on the US radar as part of the FinCEN Files investigation. One key Suspicious Activity Report (SAR) puts the total number of suspicious transactions related to Rosy Blue and its affiliates between 2014 and 2016 at 6,265.
The Pandora Papers, leaked documents that were recently released, show that Rosy Blue has restructured its offshore network after a previous expose in Panama. The company has formed offshore companies in tax havens such as the Cook Islands and Guernsey.
The 12 Indian firms and Al Roza Group of Russia who signed a diamond agreement in 2018 were:
- Rosy Blue
- Shree Ramkrishna Gems
- Hari Krishna Exports
- Venus Diamonds
- Gitanjali Gems
- Blue Star Diamonds
- Bhansali Gems
- Shree Ganesh Jewellery
- Export Corporation of India
- Sanghvi Diamonds
- MMTC (Metals and Minerals Trading Corporation of India)
Diamond Agreement between Indian Firms and Al Roza Group
In 2018, twelve Indian firms entered into a significant diamond agreement with the Al Roza Group of Russia. This agreement aimed to facilitate the supply of rough diamonds valued at $3 billion over a three-year period. The accord was widely interpreted as a testament to the burgeoning economic relationship between India and Russia. Regrettably, the Al Roza Group opted to terminate the agreement in 2020, citing “force majeure” due to the unprecedented COVID-19 pandemic and the subsequent downturn in the global diamond market.
This termination had profound financial repercussions for the Indian firms involved. Notably, Rosy Blue, one of the participants, faced substantial losses amounting to $100 million, which had to be written off. Responding to this breach of contract, the Indian government initiated legal action against the Al Roza Group.
The diamond cutting and polishing sector holds immense significance in India. Employing nearly a million people, it plays a pivotal role in the nation’s economic landscape, significantly contributing to export revenues. Notably, India stands as the globe’s largest diamond exporter, with a remarkable nine out of ten diamonds worldwide passing through the country. Here, the majority of these diamonds undergo cutting and polishing.
It’s noteworthy that a provision in US sanctions allows Russian diamonds to access international markets following the completion of cutting and polishing processes in India. Nevertheless, the strictures of US sanctions against Russian diamonds could potentially deal a crippling blow to India’s own diamond industry and export endeavours.
The current status of the investigation into Rosy Blue’s alleged involvement in offshore tax probes.
The FinCEN Files investigation had flagged Rosy Blue in relation to offshore tax probes, prompting scrutiny from the US authorities due to its link to a larger corruption case involving Petrobras in Brazil.
It’s worth noting that it has taken measures to ensure financial compliance by appointing dedicated AML-KYC officers in each entity to oversee possible suspicious transactions.
Recent revelations from the Pandora Papers, a leaked document set, indicate that Rosy Blue has undertaken a restructuring of its offshore network subsequent to a previous exposure in the Panama Papers. This restructuring involves establishing offshore companies in tax havens such as the Cook Islands and Guernsey.
Founder of Rosy Blue Diamond: Arunkumar Mehta
Arunkumar Ramniklal Mehta was an Indian Oligarch and the founder and Chairman of Rosy Blue Group of Companies. He was born on January 9, 1940, in Patan, Gujarat, India, and passed away on June 14, 2020, at the age of 80, in Mumbai, India. He co-founded B. Arunkumar & Co. as a partnership firm with his uncle in 1960, which later became Rosy Blue, one of the top six diamond companies in India. Arunkumar Mehta was the chairman of Rosy Blue (India) and a founding member of the Diamond Exporters Association Ltd.
Russell Mehta: MD Rosy Blue Diamond
He is an Indian oligarch who is the managing director of Rosy Blue India, the Indian arm of the family-owned Indian conglomerate with interests in retail, media, real estate, financial services, and diamonds.
Here are some key points related to Russell Mehta
He is the son of Arunkumar Mehta, a co-founder of B. Arunkumar & Co. which later became Rosy Blue.
Rosy Blue is ranked among the top diamond companies in India.
His uncle, Dilip Mehta, appears in both the Panama Papers and the Paradise Papers.
Russell Mehta has been involved in several controversies over the years, including allegations of tax evasion and money laundering.
He is married to Mona Mehta and has three children: Viraj Mehta, Diya Mehta, and Shloka Mehta.
Conclusion
Rosy Blue Diamond, a major diamond trader with an international presence, raises serious concerns due to its recurring controversies. The company’s founders, the Mehta family, have consistently appeared on black-money lists, hinting at potential financial misconduct. Allegations of loan defaults, false arrest reports, and offshore tax probes further tarnish its reputation.
Russell Mehta, as the Managing Director of Rosy Blue India, is central to these issues. Despite claims of innocence, the company’s involvement in leaked documents like the Panama and Pandora Papers suggests attempts to exploit legal loopholes.
Ongoing investigations by regulatory bodies, particularly in the US, underscore the gravity of the allegations. While denials persist, the company’s track record raises significant doubts about its ethical practices and transparency.
