In 2009, while most banks were reeling from the financial crisis and paring back risk, Standard Chartered dove headlong into the dangerous game of diamond lending, according to a report from Franz Wild, Thomas Biesheuvel and Stephen Morris in Bloomberg Businessweek.
The London-based bank began courting a
cadre of diamond barons, whose companies would
eventually borrow billions to finance their business of buying rough stones
from miners like De Beers, cleaning them up, and then selling them to
retailers, according to the report.
Kishore Lall and other leaders of the diamond-lending unit pushed ahead full steam in their
initiative to be the premier financier, ignoring warning signs and flouting
risk-control practices along the way, according to the report.
When consumer demand flagged and diamond prices dropped — they've fallen 20% in the
past few years, according to Bloomberg — Standard Chartered was caught holding
the bag on hefty sum of bad debt.
2-Hole Irrelvlar Diamond Acrylic Stone
T615
Since 2013, Standard Chartered has booked
losses of some $400 million to these clients on loans that once reached as much
as $3 billion. With $1.7 billion in loans still outstanding, the losses could
rise, and CEO Bill Winters is "still trying to clean up the mess,"
according to Bloomberg.
hua.tien@msa.hinet.net
http://www.hwatien.com/en/
hua.tien@msa.hinet.net
http://www.hwatien.com/en/
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