As reported by Jeweller last week, a group of companies, including one trading as Bensimon Diamonds at Crown Casino Melbourne, was placed in liquidation on 1 July.
It has since been revealed that Ronnie Ben-Simon, director of Bensimon Retail Group (BRG), was ordered by the Supreme Court of Victoria to pay more than AU$670,000 to Melbourne-based diamond supplier Australian Diamond Trading Corporation (ADTC) for failing to return a number of stones supplied to him and his company.
The diamonds were transferred from ADTC to Ben-Simon between 15 September and 24 December 2015 ‘on approval’, an agreement whereby goods are provided for a pre-purchase inspection and can then be returned to the supplier after a specified period if not sold.
Court documents obtained by Jeweller stated the diamonds – weighing between 1.00 and 3.14 carats – range in value from US$2,781 (AU$3,676) and US$81,510 (AU$107,892).
Urgent court order
A solicitor representing ADTC told Jeweller that in most cases Ben-Simon pledged the goods to third parties as securities for loans for himself or his companies or for goods sold and delivered to him or BRG.
ADTC sought an urgent court order for either the return of the diamonds or payment of their value plus costs and interest, which was granted by the Supreme Court of Victoria on 2 June.
“Mr Ben-Simon did not deliver up those goods and he informed the court that he had in most cases pledged the goods that he had received on consignment to obtain loans for himself or his company,” ADTC’s solicitor said.
He added that in one case Ben-Simon told the court he did not recall what he did with a 2.5-carat diamond valued at US$48,075 (AU$63,528) supplied on approval – whether he used it to secure a loan or whether he had put it in stock and sold it was reportedly unknown.
Further, ADTC’s solicitor, who asked not to be named, reported that two businesses – Sell Your Gold and IBorro – which both accepted a number of his client’s diamonds from Ben-Simon as security, have been prohibited from selling or dealing the goods until further notice following a separate court action on 23 June.
IBorro subsequently submitted a voluntary court undertaking not to do so during the proceedings.
On 1 July, ADTC obtained the issue by the official receiver of a Bankruptcy Notice against Ben-Simon, which was served on 3 July. A bankruptcy notice requires the debtor to pay the debt within 21 days. If they fail to pay the debt, they have committed an act of bankruptcy.
The money unpaid to ADTC formed part of more than $2 million Ben-Simon and his companies collectively owed to trade creditors.
When Jeweller contacted Ben-Simon for comment he replied via email saying, “The matter is currently before the court and it is inappropriate to comment on current legal proceedings. When it is appropriate I will be happy to provide a comment.”
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