Tuesday, June 09, 2015

(IOL SA) Diamond scandal hits De Beers

COMMENT - De Beers and Beny Steinmetz are colluding to steal South African diamonds, through Beny Steinmetz' Ascot Diamonds (Pty) Ltd. This is where the money is going that should be diversifying the South African economy, and eliminate poverty.

Diamond scandal hits De Beers
- Crime & Courts | IOL News
Independent Newspapers Online

Johannesburg - A senior government diamond valuator in Joburg has accused his bosses of blocking his investigation into diamond giant De Beers – and then firing him to shut him up.

Conrad Benn, the country’s first black diamond valuator, has launched an urgent application in the high court in Joburg to challenge the South African Diamond and Precious Metals Regulator’s decision to suspend him in April last year and fire him last month.

Under section 74 of the Diamond Act, De Beers is exempt from getting permission to sell its diamonds overseas – if it can show that for any of its sales exceeding R5 billion, at least 40 percent of it benefited local companies.

Benn said that instead of a total of 11 local companies benefiting, a single off-shore company received the lion’s share.

He has submitted an affidavit from one of De Beers’ other sight-holders, Israeli businessman Erez Daleyot, that De Beers and the Swiss-based, Israeli-owned Steinmetz Group “are working in collusion with (Levy) Rapoo (the chief executive of the diamond regulator) and stealing from the nation of South Africa”.

Rapoo asked Benn to verify the claim. Benn found in November 2013 that De Beers was not complying with the act.

“Of the 40 percent of the gross value of the production cycle to beneficiaries in South Africa, 35 percent was sold to one customer, being Ascot Diamonds (Pty) Ltd. Ascot Diamonds is part of a group of companies owned by a major worldwide diamond entrepreneur, Beny Steinmetz.

“I analysed the 35 percent sold to Ascot Diamonds and noted that it consisted of purchases of ordinary usual diamonds as well as a substantial portion of what is known as ‘exceptional stones’.

“These can be described as large diamonds of good colour and clarity and are the best of any production cycle. They are the cream of the crop,” Benn said.

He said his findings made him uncomfortable and he had made countless efforts to raise it with the relevant authorities in De Beers.

He said that instead of resolving the matter, De Beers wrote a letter to Rapoo accusing Benn of leaking confidential corporate information to a third party.

The regulator then made an “Anton Piller” application, using information given to it by De Beers, said Benn, allowing local law firm ENS Forensics to search Benn’s house and seize his laptop.

Benn was suspended before facing a disciplinary hearing chaired by advocate GJ Fourie, who, Benn told the court, had been appointed by ENS Forensics. Fourie fired him last month.

In his papers, Benn remains adamant that the motive of the regulator was to “get rid of him” instead of probing allegations of wrongdoing by De Beers.

He was the regulator’s senior manager in the valuation department.

Benn worked for De Beers in Kimberley after matriculating at St Patrick’s College in that city. He worked there until 1998 when he joined the regulator, leaving in 2003 to join a private diamond mining company.

He returned to the regulator in 2008 and was later appointed senior manager.

Benn has asked the high court to stop the disciplinary proceedings until his new counsel had familiarised himself with the allegations.

He is adamant that the process has been launched “because I had uncovered the skewed allocation of exceptional stones. The purpose of getting rid of me is to stifle my investigation,” he said.


The Star

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At 6:47 AM , Blogger MrK said...

(BETTER DIAMOND INITIATIVE) Another diamond scandal rocks De Beers Diamond Industry
Jun 8, 2015

De Beers is amidst another shocking diamond scandal. Conrad Benn, senior manager in the valuation department of South African Diamond and Precious Metals regulator, who was fired last month by the regulator after he was suspended last April, has applied in the High Court challenging the regulator’s decision and accusing his boss Levy Rapoo and De Beers of obstructing his investigation.

Under local laws, if De Beers can show that at least 40% of its sales exceeding 5 billion Rand benefits local companies then it is can sell its diamonds overseas sans any permission requirements. One of De Beers Sightholder – Erez Deleyot, an Israeli businessman, had submitted an affidavit stating that De Beers, Swiss based Israeli-owned Steinmetz Group and Levy Rapoo – regulator’s chief executive have colluded and are stealing from South Africa. When Rapoo asked Benn to verify this claim, Benn found that of the 11 local companies benefited from De Beers, major share was to a single off-shore company and De Beers was not complying with the laws.

De Beers
Beny Steinmetz [Image Courtesy: The Guardian]

35% of the 40% gross value to local beneficiaries was sold to Ascot Diamonds, owned by major diamond businessmen Beny Steinmetz and consisted of substantial portion of ‘exceptional stones’. Benn said that these large diamonds were of good color and clarity and best of the production cycle. To investigate this further, he had repeatedly contacted De Beers authorities but instead of co-operating they wrote to the regulator accusing Benn of sharing confidential information to third party resulting in ENS Forensics, a local law firm, to search his house and seize his laptop. Benn has told the High Court that the disciplinary committee in which he was fired, was chaired by GJ Fourie, who was appointed by the same local law firm – ENS Forensics.

Though this is not the first time that De Beers has been surrounded by scandals and controversies. Recently, a beneficiation scandal was uncovered in Botswana where De Beers used loopholes in the agreement to smuggle diamond roughs out of the country for processing instead of processing them locally, thus defeating the very purpose of beneficiation. Several local processing units that had started on the basis of beneficiation are shutting shops and thousands of jobs lost.

De Beers

De Beers’ clout scares many industry stakeholders and its domination and influence causes unrealistic gem prices. St. Antoninus Institute has termed De Beers as ‘The most unethical corporation in the world’.

Instead of facing and solving its griming reality, De Beers has turned to such malpractices together with its revival of ‘A diamond is forever’ campaign in hope that gullible people will be fooled again for centuries, forever.


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