Vashi - Diamond Manufacturers Limited - How Refundee Won Investors Money Back

When a luxury jewellery company called Diamond Manufacturers Limited (Vashi) collapsed in 2023, investors were told their money was gone. Even though investors were eligible for reimbursement under the Contingent Reimbursement Model Code,  the banks told investors they were not eligible and deemed it a “civil dispute”. Refundee challenged that decision via the Financial Ombudsman Service and won investors money back.  

Read the story of how it happened.

A Luxury Brand on The Surface 

Diamond Manufacturers Limited, which traded as Vashi, represented itself to be a highly profitable, fast-growing diamond jewellery business based in London.  

The company raised money from investors, attracting many high-net-worth individuals. Vashi had stores around the UK and claimed that they were planning to open more.  He even appeared on ITV’s This Morning putting a necklace on Holly Willoughby and showing off other valuable jewellery.  

Its accounts filed at Companies House told a similar story of a successful company: rising profits, large cash balances, and diamond stock valued at well over £150 million.

The Collapse

However, in April 2023, everything came crashing down and the company collapsed, reportedly owing £170 million mostly impacting individual investors. 

Liquidators were appointed, and the company stopped trading immediately. Vashi Dominguez fled the country and his whereabouts is unknown. 

Liquidators later reported that diamond stock declared at £156 million was worth around £100,000.

The case drew attention with various media outlets reporting on the case, with Refundee featuring in the BBC and The Times.

How Refundee Helped Investors

When investors came to us in 2023, we knew something wasn’t right. So, our specialist team conducted a thorough investigation into what happened.  

We took the case to the banks and submitted comprehensive evidence of fraud, including:  

• An expert diamond report - assessing the true value of the diamonds investors were told about.  
• Evidence of disciplinary proceedings against the auditor who has admitted to signing off stock lists and accounts without seeing them
• A comprehensive analysis of how investor money was actually used and what turnover really was compared to the declared figures in the accounts 
• A clear record of the misrepresentations made to investors to deceive them into investing.  

The Banks Rejected Liability

There is a major conduct issue where banks are falsely labelling scams as civil disputes, meaning that they are not eligible for reimbursement under the applicable reimbursement rules that only cover scams. As we see in many cases, the banks also rejected Vashi claims on the basis that they were simply investments gone wrong rather than frauds.

We escalated the complaints to the Financial Ombudsman Service. At the early stages the FOS did not side with the investors and found that they were not entitled to a refund.  

For most people, this would have been the end of the matter, but for Refundee it wasn’t. We believed the evidence of fraud was clear and we continued to fight for investors. While this was a sophisticated scam in its delivery, once it came crashing down, it was obvious for all to see that investors were defrauded. 

Refundee Overturned the Result

We drew upon our extensive experience to submit an appeal to the Ombudsman, clearly demonstrating that investors were entitled to a refund.  

To their credit, the Ombudsman reviewed Refundee’s evidence and appeal and overturned the original decision, ordering the banks to refund victims. We’re delighted with the result. Millions of pounds will now be returned to people who believed their money was gone for good.  

Cases like this show what our team does best and how specialist expertise really matters. It is this expertise that has made Refundee one of the market leaders in group action cases. 

Refundee co-founder, Stuart McFadden commented on the case stating:

“This is a great result for investors and it is amazing to see them get the justice they deserve after wrongly being denied reimbursement.

Because of the date they made the payments, investors were lucky that they were covered by the Contingent Reimbursement Model Code rather than its replacement, Mandatory Reimbursement. This is because Mandatory Reimbursement has significantly weakened people’s protection from investment scams by reducing reimbursement to £85k and making it a qualifying factor that people need to report the fraud within 13 months of their last payment to the scam. Fortunately for our clients, most were covered by the earlier Code.” 

Have You Lost Money to Vashi/Diamond Manufacturers Limited?

If you have lost money to Diamond Manufacturers Limited or another scam, then Refundee may be able to help you recover your funds. 

We only work to a no-win, no-fee commitment and never charge upfront fees. 

Get in touch today for a free consultation.

Refundee is authorised and regulated by the Financial Conduct Authority (FRN: 937096). You do not need to use a claims management company to complain to your bank or the Financial Ombudsman Service, and you can do so for free.

More about Refundee

Here are the technical bits:

Refundee Ltd is a claims management company authorised and regulated by the Financial Conduct Authority in respect of regulated claims management activity FRN: 937096.

Registered with the Information Commissioner's Office; registration number: A8986071.

Registered office address: Refundee, 3rd Floor, 86-90 Paul Street, London, EC2A 4NE.

Registered as a company in England & Wales; number: 12855931.