Deepak Int'l sued by companies that financed diamond plant purchase
Yellowknife diamond cutting and polishing plants still empty 2 years after purchase announced
Deepak International, the company that bought two empty diamond cutting and polishing plants in Yellowknife, is facing a lawsuit in Ontario by the firms that helped arrange the financing for the purchase.
According to court documents, two months before Deepak International paid $1.9 million for the plants, it got access to financing of up to $20.5 million.
The financing was arranged by Sol Ashraf of Chippingham Financial Group. The loan itself came from Callidus Capital Corporation. It's a publicly-traded company that bills itself as providing "financing solutions for companies that are unable to obtain adequate financing from conventional institutions."
In their statement of claim, Ashraf and Chippingham say Deepak International agreed to pay a finder's fee, but has so far refused to pay anything. They are suing for $615,000.
When Deepak agreed to buy the plants, Industry, Tourism and Investment Minister David Ramsay said it signalled the re-birth of the diamond cutting and polishing industry in the N.W.T.
More than two years later, the two plants remain empty.
Calls to Deepak Kumar, the president and CEO of Deepak International, were not returned. Ashraf also refused to comment.