Once upon a time almost a century ago, 95% of the world's richest diamonds were manufactured in South Africa with almost 3 tonnes of gems brought alone from Kimberly hills, which now has shrunk in size as the diamond industry has found a way to manufacture lab-grown diamonds which are Original's look alike but are very difficult to recognize.
Lab-grown diamond businesses are now spreading all across India & united states predominantly as the diamond companies are now starting to engage in Malfare trade practices by growing diamonds in the laboratory through the help of scientists & technicians making the customers, buy it at the price of originals.
The Revelation
One such revelation has been made against one of the renowned Indian companies named Gitanjali Gems. For a long time, they have been fooling their customers by selling them fake diamonds which are made of Carbon vapours known as Carbon Vaporized Diamonds.
So, what is exactly happening right now is that industrialists are using this CVD technology to make unnatural diamonds thereby saving their costs & time & selling the same at retail outlets at hefty prices at which the original diamonds are sold, even nowadays diamonds are getting overvalued.
CHECK OUT HOW CVD DIAMONDS ARE MADE
Diamonds are priced based upon the following factors :
1. Shape - Round diamonds are the priciest following Princess cuts, cushions, asschers & radiants.
2. Colour - D grade colour being expensive but followed by colours like Red, green & blue.
3. Clarity - More imperfections less price, gemologists can only find out the Precise clarity grade.
4. Size - The bigger the size bigger the rate, as magic size hikes so do the price to ex 0.5,1.0, 2.0 & 5.0 carats out of which 5 carats are the most expensive.
5. Fluorescence - Fluorescence is how a diamond reacts when exposed to U-V light as 1/3rd emits blue light. Turn negative for the pricing of Higher grade diamonds & positive for the lower grade diamonds.
6. Cut: Excellent cut grade is the ideal one as it is priced 15% higher than very good cut grade which is further priced 15% higher than the good cut grades. Only round diamonds are given cut grades.
7. Polish: The Polish of the diamond also plays a role in pricing but is considered less worthy than the cut grade.
8. Symmetry: The symmetry of the diamond determines the price factor too.
Now just Jump back to the revelation !!
So even the CVD diamonds are overly priced for no good reason.
Forex. If somebody buys these diamonds thinking they are the original ones at Rs 50,000 per carat, then they probably don't know that CVD would've actually cost them somewhere around Rs 3000 to Rs 4000 per carat thus having a huge loss thereby diamond businessmen are easily making huge profit margins by way of fooling Millenials.
Gitanjali Gems have been duping almost 10,000 customers on a monthly basis sources revealed.
A Tip for Diamond investors
It is always advised to check the certification label of a diamond before buying it. One of the biggest certification labels is of the Gemological Institute of America. Clinically tested diamonds are the ones considered to be pure because only Gemologists have the expertise to recognize the real diamonds among the fake ones.
Round Tripping scam
Definition - Round tripping means when diamonds are transported from place to place for the purpose of Import & export where the importer and the exporter are the same organisation having different shells all across the countries.
This means that the Buyer & the seller are the same organisation but in different geographical locations trying to pretentiously show the government that a serious trade is going on but in actuality, it isn't.
As the Nirav Modi & PNB scam took heights, this scam was revealed by a key whistleblower who was an ex-employee of Gitanjali Gems which was owned by Nirav Modi's uncle Mehul Choksi who is a mastermind in such connivance.
Let me break it down for you real easy,
For eg., let's say there is a businessman named Nirav Modi who is having shell companies in India, Hong Kong, Malaysia, Singapore, Dubai & Belgium. So, he used to transport diamonds from Hong Kong to Malaysia conveying to the bank officials that he was importing goods from a company in Hong Kong for his company in Malaysia, the same diamonds used to be transported from Malaysia to Singapore giving the same excuse to the bank, then Singapore to Dubai then to Belgium & then to India & this trip use to go round & round.
But here's the trippy part,
He used to record the invoices of the diamonds in the PNB bank's accounting books at a highly overvalued price. Ex. if the diamonds are worth Rs 100 crore he would be invoicing them at Rs 1000 crore & use it to take a loan from the PNB bank via issuing fake LOUs to them. So, PNB used to extend the loan to Nirav Modi for each & every movement included in this round trip.
The real ordeal is that PNB can never track down the locomotion of the diamonds because of the absence of Unique Identification number tags on them. Had the identification tag been there still it could be removed & could be replaced with another one as per sources revealed.
The uncle & nephew duo has done a lot of damage to the bank's financial strength due to a similar unethical code of conduct.
Final Word
The Real concern is that such big chunks of loan lending cannot be decided at just the Managerial level in the bank but there has to be the intervention of the Government too. Sources also say that the Top officials of the PNB bank were aware of the scam going on long ago as well as the finance ministry & ministry of corporate affairs, so why didn't anybody take any action against such odds prior which led to the massive loss as a consequence.
What are your opinions on this matter, drop them down in the comment section below.
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