(Bloomberg) -- A Belgian court ordered lender KBC Group NV to return seized assets from one of the diamond industry's most storied names within 24 hours, a court ruling shows.
Exelco NV was on track to repay loans to KBC by 2020 as planned, so the lender's early seizure of assets was unnecessary, the Antwerp court ruled on Thursday. A spokesman for KBC declined to comment. Exelco also declined to comment.
KBC is seeking to recover 26 million euros ($30 million) from Exelco. Bailiffs last month searched the firm's Antwerp offices, as well as offices belonging to De Beers and ABN Amro Group NV, where Exelco may also hold assets, according to court documents. Exelco also has credit lines with Standard Chartered Plc, Thursday's ruling said.
Companies polishing and trading diamonds are struggling to get credit as major banks seek to reduce exposure to the industry. Standard Chartered, one of the two leading lenders to the industry, said last year it was exiting diamond financing, while KBC's Antwerp Diamond Bank, which made up about a 10th of the financing market at its peak, is being wound down.
Exelco lost its status as one of De Beers's 80 or so handpicked customers, known as sightholders, this year as it had been buying fewer diamonds from the top producer in recent times. It's now an accredited buyer, meaning it's not guaranteed a set supply of rough diamonds and instead buys on a more ad hoc basis, people familiar with the change said. The company is still listed as a sightholder on both its and De Beers's website.
Exelco was founded by Leon and Lior Kunstler and Jean Paul Tolkowsky in 1993. Tolkowsky is a scion of one of the industry's most famous families, who made their name cutting the biggest and most expensive gems. Family members include Marcel Tolkowsky, who is seen as the father of the round brilliant diamond cut, and Gabi Tolkowsky, who was chosen by De Beers to cut the 546-carat Golden Jubilee diamond, the largest faceted stone in the world.
To contact the reporters on this story: Franz Wild in London at fwild@bloomberg.net, Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net.
To contact the editors responsible for this story: Alan Katz at akatz5@bloomberg.net, Tony Barrett, Nicholas Larkin
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