Deepak Kumar a no-show at Yellowknife court hearing

The man at the centre of a troubled attempt to revive diamond cutting and polishing in Yellowknife did not show up in a Yellowknife courtroom yesterday for a decisive hearing in a lawsuit he is facing.

"Why is your client not here today?" Justice Andrew Mahar asked Douglas McNiven.

McNiven is representing Deepak Kumar, his companies Deepak International and Deepak Developments, and his wife, Ragini Kumar, all of whom are named in the lawsuit.

"He was busy trying to get financing," said McNiven.

Callidus Capital Corp. is suing for $4.53 million. It alleges Kumar failed to live up to the terms of his loan agreement by not making property tax and lease payments on the two diamond plants, failing to properly insure them, and failing to provide financial information on his business.

"Mr. Kumar is the author of his own demise," said Callidus lawyer Glen Rutland.

He asked the judge to award Callidus everything it's asking for without a trial. That happens in rare civil cases where defendants fail to provide evidence disputing the claims against them.

Mystery sea cans

Callidus also alleges Deepak obtained the loans fraudulently. It says Deepak put up high-tech diamond cutting equipment valued at $18 million as security for the financing. Callidus says Deepak told it the diamond equipment was stored in sea cans near the diamond plants.

• Deepak diamond factory financier says it was duped by mystery seacans

Callidus says it advanced Deepak just over $2 million without actually having seen that security. Callidus says Kumar prevented inspections earlier by claiming opening the containers would void warranties on the equipment.

Callidus started getting nervous after Deepak agreed several times to have a representative of the manufacturer present to open the containers, then failed to do so. In its lawsuit, it includes a copy of a bill of sale for the equipment and a signed note allegedly from Kumar's father, saying he had paid for the equipment.

"Where is the equipment?" asked Mahar three times during Wednesday's hearing.

"It's in containers," said McNiven. "I'm not sure where they are."

'Shell game'

Kumar also does not shed any light on the whereabouts of the diamond cutting equipment.

"I made no misrepresentations regarding the acquisition, existence or whereabouts of the diamond equipment," said Kumar in a May 21 affidavit.

That's the only time he has referred to the equipment.

He has made no mention of $15 million in rough diamonds he offered through an email from his lawyer in a last minute attempt to prevent a receiver appointed by Callidus from opening the containers.

Mahar used phrases such as "shell game" and "absurd" to describe Kumar's defence arguments.

"It's been two years now," said Mahar.

"All (Kumar) has to do is get a representative from (the manufacturer in) India over to open the containers and take a picture. And while the representative is here he could swear an affidavit testifying to the existence of the equipment."

At one point Mahar considered adjourning the hearing to allow Kumar another chance to come to Yellowknife to testify. McNiven agreed to contact his client by phone during a brief adjournment.

Trip to India

"I've spoken to Mr. Kumar and he's available to provide (oral) evidence," said McNiven after the break.

"But he has a trip scheduled for India."

McNiven said Kumar, who now lives in Mississauga, Ont., wants to visit his ailing mother and is not available until after June 19. He said part of the reason for going to India is to secure financing to pay off Callidus.

Rutland said Kumar could be in Yellowknife the next day if he really wanted to.

"The plaintiff has grave concerns about Mr. Kumar going to India. There's no guarantee Mr. Kumar will come back. He had an opportunity to be here today. He chose not to do so."

Mahar adjourned the hearing to Thursdaymorning for final arguments.