Nedbank Sues Peykar, Claiming Embezzled $37 Million in Diamonds

The South African bank Nedbank Ltd. has sued Peykar International Co., claiming one of its owners embezzled $37 million in diamonds, Bloomberg reported Thursday. Peykar is accused of not paying for memo goods it received from New York- based Fine Diamonds LLC, a subsidiary of South African Sightholder Festdiam which now in liquidation.

Festdiam supplied Peykar with some $100 million worth of polished diamonds through Fine Diamonds. After receiving some of the proceeds from the sales, an estimated $37 million were unpaid and Peykar, whose principal office is in New York but made most of its sales in Israel, did not return the goods.

After Festdiam filed a complaint with the Israeli police, Peykar owner Meir Peykar was arrested December 14, 2008. He is now under house arrest.

Festdiam principal Lester Meents told IDEX Online in January “We are currently investigating the nature of the Peykar relationship.”

It is understood that the loss caused Festdiam’s collapse. Nedbank, which is owed $11 million in loans it made to Festdiam, is trying to recover these funds.