US Investors Seek FBI Aid Over Collapse of Vashi Diamond Retailer

Outraged US investors have sought the intervention of the Federal Bureau of Investigation following the collapse of British jeweller Vashi, amid allegations of being misled in what is described as a potential Ponzi scheme. Vashi, which traded as Diamond Manufacturers Ltd, entered liquidation in 2023 with debts spiralling to £170 million and creditors numbering nearly 5000, after attracting investment from high-profile business figures on both sides of the Atlantic.

The Serious Fraud Office and Metropolitan Police have yet to launch investigations into the company, but the involvement of the FBI could increase pressure on UK regulators to examine Vashi’s demise. Central to investor concerns are accusations against chief executive Vashi Dominguez, who allegedly misrepresented the financial health of the now-defunct business. Dominguez, a charismatic Tenerife-born jeweller, departed the UK after the company’s collapse and has remained uncontactable by liquidators.

During 2020 and 2021, Dominguez and his team conducted investment roadshows in America, personally lobbying potential backers with impressive audited accounts and bold promises of US expansion, including a flagship shop in New York. Marketing materials described Vashi as a disruptive force in luxury jewellery, highlighting year-on-year revenue growth of 121 per cent for 2021 and more than $58 million raised for upcoming expansion.

Confident in the figures and their own due diligence, US investors committed millions of pounds, yet unsettling doubts surfaced when Vashi struggled to make scheduled interest payments. When questioned about the need for further capital despite promises of robust revenue and inventory, some investors grew wary, likening the operation to a Ponzi scheme.

The scale of apparent misrepresentation soon became clear. While Companies House filings listed sales exceeding £100 million for 2021, internal documentation uncovered actual sales of only £5 million. Stock valued in investor reports at £157 million was in reality appraised at just £100,000. These revelations have prompted scrutiny from creditors, including prominent British investors such as Phones4u founder John Caudwell and Charles Tyrwhitt’s Nick Wheeler, who together had contributed substantial sums to the ill-fated enterprise.

Despite frustration among investors at the lack of formal investigation in the UK, with liquidators and police yet to take action, hopes now rest with the FBI to pursue possible charges if US investors were indeed enticed under false pretences. The collapse of Vashi has raised urgent questions about the responsibility of UK authorities to investigate major financial failures and protect both domestic and international investors from significant loss.