What began on that overcast December day in 2012 turned out to be just the start of the problems for the secretive family-run diamond trading houses that have defined the Belgian city of Antwerp for centuries.
They make up the invisible link between African mines and jewelry stores in New York, London and Hong Kong, and are being squeezed like rarely before. The banks whose loans they relied on to buy gems are pulling out of a business they no longer think is worth the risk in the post-financial crisis age of increased regulation and scrutiny.
Mehta managed to switch to another lender after his brush with disaster, but now it too wants out. He’s adamant he can overcome anything. “I’m not the person to run away,” said Mehta. “This business made me what I am.”
It’s a corner of global commerce that’s been barely touched by any corporate machine. There are no 21st century compliance departments, paper trails or investors to answer to. But the antiquated world is being upended.
In the good old days, the world’s monopoly producer, De Beers, would give a select group of about 100 traders discounted rough rocks and banks would provide the money to buy them. The profit came from processing the diamonds and selling on the polished stones, in Mehta’s case to the U.S. and Japan and more recently China.
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