jewel heist bombay £1.2m raid exposes security flaw in booming diamond industry

by Jeremy Page in Delhi October 19, 2007 found at http://www.timesonline.co.uk  

Police said that the stones were taken on Tuesday night from a locked wooden drawer in the office of Aarshit Gems, in the Pancharatna building, the centre of the Indian diamond-polishing industry.

The robbery came only a week after diamonds worth £500,000 were apparently stolen while being unloaded from a Thai Airways flight at Bombay international airport.

The gems – and several gold ornaments – were found stuffed in 74 plastic bags in a gutter near the Air India canteen at the airport on Monday. Three Air India baggage handlers have been arrested.

Last November two carpenters stole diamonds worth half a million pounds from the Bombay residence of Pratap Zaveri, the owner of one of the biggest chains of jewellery shops in India.

The robbers were arrested as they celebrated by spending more than 200,000 rupees (£2,500) within 90 minutes in an upmarket bar.

Diamonds worth £1.2 million have been stolen from the headquarters of the flourishing Indian gem trade in the third big jewel heist in Bombay within a year.

The three thefts have thrown a rare spotlight on India’s secretive diamond trade, which from humble beginnings has grown to put Bombay on a par with Antwerp and Tel Aviv.

India no longer produces rough diamonds from its own mines, once the source of such famous stones as the Kohinoor, which sits in the British Crown Jewels.

But thanks to its low labour costs, it has built a multibillion-pound industry on importing small diamonds and then polishing and setting them for reexport to rich Western and Asian markets.

Most of the world’s diamonds – 11 out of 12 rough stones – are now cut in Bombay. Security, however, remains lax compared with Antwerp and Tel Aviv, which focus on larger, more valuable stones.

Police said they suspected that the latest robbery was an inside job because the door to Aarshit Gems’ office had been opened using duplicate keys and a closed-circuit television camera had been switched off.

Senior Inspector N. R. Mali said that one of the company’s employees had gone missing, as had another man who had introduced him to the owner of the company.

Other diamond traders said that they were concerned by the poor security at the Pancharatna building, which handles diamonds worth millions of pounds every day. Many traders are planning to move into a 20-acre modern diamond trading centre that is under construction in Bombay and expected to start operating by the end of the year. The Bharat Diamond Bourse, costing about £100 million, will be one of the largest of its kind in Asia and will house about 2,500 diamond traders.

Its developers say that it will have similar security to its equivalents in Antwerp, including vaults and surveillance systems.

1: the daily wage, in pounds sterling, of an Indian diamond cutter

54: the number of countries, India included, that endorsed the Kimberley Process: assuring that imported diamonds do not come from the “conflict areas” of Angola, Liberia, Sierra Leone or Congo

30,000: the estimated number of children employed in the Indian industry

1m: the total number of people employed in the Indian industry

4bn: the annual turnover, in pounds sterling, of the Indian industry