Surat traders to float co to buy diamonds directly

Diamond traders here are floating a company to facilitate direct procurement of rough diamonds from the mining countries.

The proposed firm, Surat Diamond Sourcing, was likely to have a corpus of over    1,000 crore (   10 billion), a top body of the traders said on Tuesday.

"The proposed company is likely to have a corpus of over    1,000 crore (   10 billion) with contributions coming from nearly 500 members paying    1.8 crore (   180 million), who shall be the founder shareholders and another 1,000 members who will pay    54 lakh (   5.4 million) each," Surat Diamond Association President Rohit Mehta said.

"SDS will soon be incorporated under the Company Act and registered with the Registrar of Companies.

The shareholders will be issued shares of    10 each," he said.

The founder-shareholders shall have voting rights, while those paying    54 lakh will enjoy all benefits of being a shareholder except voting rights, Mehta said.

"The company shall be directly bidding for procurement of rough diamonds from mining countries such as Canada, Russia and those in Africa, and shall be selling it through a tender system to diamond units here," he said.

"Despite being a hub of diamond polishing and cutting, we have to rely upon Antwerp (Belgium) and Dubai for getting rough. In majority of cases, traders are being cheated by brokers, while there is always a shortage of rough in global markets," Chairman of Bluestar Diamond Asit Mehta said.