Calls for Investigation into Vashi’s Collapse Intensify
The collapse of diamond brand Vashi, which left over £170 million in unpaid debts and missing assets, has led to increasing calls for a formal investigation.
Investors and creditors are urging the Serious Fraud Office (SFO) to probe the company’s financial mismanagement, as questions remain about the whereabouts of its founder, Vashi Domínguez, and the missing stock of diamonds.
Despite the SFO being provided with evidence, no official inquiry has been confirmed, adding to the frustration of those affected by the collapse.
Investors Demand Answers
Vashi, once seen as a rising star in the industry, attracted considerable investment from prominent figures, including John Caudwell, founder of Phones 4u, and Nick Wheeler, founder of Charles Tyrwhitt. However, the company’s financial troubles became public in 2023, when Vashi was declared bankrupt after failing to meet its debt obligations.
John Caudwell, who had invested £1 million in the company, raised the alarm after a mystery shopping exercise left him unimpressed by the brand’s customer service and product quality. His subsequent visits to Vashi’s flagship store in Covent Garden cast further doubt on the company’s financial performance. “It just didn’t add up,” Caudwell commented, referring to the discrepancy between reported sales figures and the store’s apparent lack of footfall.
Michael Moszynski, another investor, voiced his frustration, stating: “I’m angry with Vashi, the auditors, the gem valuers and those around him; this appeared a sound investment. Investors are now calling him ‘Vanishing Vashi’.”
With Domínguez’s whereabouts unknown and no clear explanation for the missing stock, many investors are demanding a formal investigation into the company’s operations.
Missing Diamonds and Stock Discrepancies
A central issue in the collapse is the significant discrepancy between the reported and actual value of Vashi’s diamond inventory. According to the company’s 2021 financial statements, Vashi’s stock was valued at £157 million, including £120 million in loose diamonds. However, when liquidators from Teneo were appointed to oversee the company’s winding-up, they found only £147,000 worth of stock remaining.
Teneo’s report noted, “The stock collected was deemed to be significantly lower value than that noted in the 2021 accounts.” This disparity has led to widespread speculation that the company never possessed the assets it claimed, or that they had been misrepresented. Investors are particularly concerned that the value of the diamonds, a key factor in their decision to invest, may have been inflated.
Calls for Serious Fraud Office Probe
In light of these revelations, investors have turned to the Serious Fraud Office (SFO) for answers. A dossier of evidence has been submitted by Michael Moszynski and others, urging the SFO to investigate Domínguez and the company’s auditors. However, the SFO has not yet indicated whether it will launch a formal investigation.