Settlement Info Available for Diamond Purchasers in De Beers Case

RAPAPORT…   The notice and claims process has begun in a $295-million Proposed Settlement with De Beers in the United States. Both individual consumers and members of the diamond trade are eligible to make a claim under the proposed settlement.

The settlement covers a series of class action lawsuits, which allege that De Beers charged anti-competitive prices for the rough diamonds it sold. They also claim that De Beers monopolized the rough diamond market, and disseminated false and misleading advertising. The class action lawsuits only bring claims against De Beers.

Under the proposed settlement, a $295-million fund has been created. This settlement fund will be distributed to two groups, or classes, of purchasers: the Direct Purchaser Class and the Indirect Purchaser Class.

The Direct Purchaser Class includes persons or businesses, other than Diamond Trading Company sightholders, that purchased any gem diamond directly from De Beers, or one of its diamond mining competitors, between September 20, 1997, and March 31, 2006.

The Indirect Purchaser Class includes persons or businesses that purchased gem diamonds, diamond jewelry, or other products containing diamonds from someone other than De Beers or one of its mining competitors between January 1, 1994, and March 31, 2006. The Indirect Purchaser Class is further divided into two subclasses: The Consumer Subclass, which includes persons who purchased gem diamonds and diamond products for their own use or for a gift, and the Reseller Subclass, which are businesses which purchased gem diamonds and diamond products for resale.

“This proposed settlement will provide a cash benefit to consumers who purchased diamonds or diamond jewelry, and broad injunctive relief addressing the conduct alleged in the complaints,” said Josef Cooper of Cooper & Kirkham in San Francisco, California.

More details about the $295-million Proposed Settlement and how to file a claim are available at http://www.diamondsclassaction.com/ or by calling 1-800-760- 5431.

Joe Tabacco, of Berman DeValerio Pease Tabacco Burt & Pucillo in San Francisco, said,  “We are very pleased with the Proposed Settlement. After a number of years, we were finally able to achieve a very substantial settlement of these lawsuits. I encourage anyone who believes they may be a Class Member to call the claims administrator or visit the settlement website to get complete information about their rights. Retailers and others in the diamond trade are also eligible to file claims to share in the settlement.”

Class members do not need to do anything to stay in the Class, however they must submit a claim form by May 19, 2008 to participate in the Proposed Settlement. To receive a payment, you must complete a Claim Form. Claim Forms can be obtained by visiting http://www.diamondsclassaction.com/ or by calling 1-800-760-5431.

Those wishing to object or exclude themselves from the Proposed Settlement must do so no later than March 4, 2008. The Plan of Distribution and full details on how to properly file a claim, an objection, or exclusion request are available by visiting http://www.diamondsclassaction.com/ or by calling 1-800-760-5431.

The Court will hold an approval hearing on April 14, 2008. At that time, the Court will consider whether to approve the Proposed Settlement and award attorneys’ fees and costs. All potential Class Members are encouraged to visit http://www.diamondsclassaction.com/ or call 1-800-760-5431 to determine if they are a Class Member and to obtain information about their legal rights.

Bumpy road ahead for diamond players

MUMBAI: The Indian diamond industry is in for rough days. The recent decision of Diamond Trading Company (DTC), the distribution arm of De Beers Group, to remove several Indian companies from its list of sightholders has come as another setback for an industry reeling already under the impact of a stronger rupee.

The exit of several Indian companies from the sightholders’ list will certainly make sourcing of rough diamonds difficult for these companies. This could affect the manufacturing activity.

According to market participants, DTC assured regular supplies of quality roughs at a good price and now the same would have to be sourced from open market where quality and quantity could be an issue. Sightholders are the clients or buyers of DTC and are authorised for bulk purchase of rough diamonds. Though the DTC sightholders list will be official by March, around five to 10 Indian companies have been excluded with a couple of new ones added in the 2008 list.

A prominent player in diamond industry on conditions of anonymity said that in the next five to seven years only 15% to 20% of the current cut and polished diamond business would be left in the country as there would be serious supply problems of rough diamond. “The only option for the Indian companies will be to move their units to Africa,” he said. More than a dozen of Indian companies have already moved their units to Africa, he added.

According to the figures by Gem and Jewellery Export promotion Council (GJEPC) imports of rough diamond are down by over 48% in November 2007 at 96.3 lakh carats valued at $532.4 million as against 185.6 lakh carats valued at $906.2 million in November 2006. The imports between April and November 2007 are down by 3% at 1,085.1 lakh carats valued at $6278.3 million from 1,126.3 lakh carats valued at $5530.4 million in the corresponding period last year.
However, because trading activities gradually shifting from Antwerp to Dubai and India, the exports of cut and polished diamonds have gone up.

Exports of cut and polished diamonds have increased to 30.1 lakh carats in November 2007 valued at $912.1 million as against 22.1 lakh carats in November 2006 valued at $696.9 million, while between April and November 2007, it has gone up to 261 lakh carats valued at $8526.4 million as against 211.5 lakh carats valued at $6,351.1 million between April and November 2006.

According to an official from Livingstones, one of firms to be delisted, there would be problems in sourcing. “We would have to source now from the open market where price is expected to be higher then what we were paying to DTC,” he said. There may also be problems of availability and quality, he added.

DTC recently announced 79 sightholders of which 75 will be offered supply through DTC London and DTC South Africa and rest four will receive sights through new independent joint-venture operations- DTC Botswana and Namibia Diamond Trading Company — selling rough diamonds to clients in Botswana and Namibia for the first time.

During the previous contract period (2005-07), DTC sold all of its rough diamonds to approximately 93 clients entirely through DTC London which offered sights in London and Johannesburg.

According to industry sources around 40% to 50% of rough diamond supplies by DTC come to India and more than 50% of its sightholders are from India.

However, Ashish Goenka from Suashish Diamonds said that supplies from DTC to India would still remain the same. “The cake is still the same, the players have changed. India remains a very important centre for DTC and they have always supported the Indian diamantaires,” Mr Goenka said. He added that DTC has followed a very rigorous and thorough robust process in assessing its customer list. Suashish are the DTC sightholders in India and Botswana.
Mr Goenka said trading aspect of the sector will also pick up along with the manufacturing side.

Exports from the Gem and Jewellery industry fetched $17.1 billion in 2006-07 against $16.6 billion in 2005-06, showing a growth of 26% with diamonds accounting for 64% of the total exports.

A big blow will be to the people who are employed in the industry. According to GJEPC, 150,000 workers have lost their jobs because of rising rupee but traders feel that jobs have also been lost due to crunch in supplies of rough diamonds affecting the manufacturing.

India is the world’s largest diamond processing (cutting and polishing) country with an estimated one million processors handling more than half of the world’s rough diamonds by value. According to industry estimates, 11 out of 12 stones (diamonds) set in jewellery are cut and polished in India.

In terms of carat, India’s share in this sector is about 80% of the world market. Employing over 90% of the global diamond industry workforce, India also accounts for 90 % of the volume of diamonds processed in the world.

JVC Provides Weblink to De Beers Indirect Purchaser Claim Form

RAPAPORT… New York City – December 28, 2007: A link to the form to make a claim under the De Beers Indirect Purchaser/Reseller class action lawsuit is available on Jewelers Vigilance Committee’s (JVC) website, http://www.jvclegal.org.

JVC’s website includes guidance to complete the form and a series of frequently asked questions. The lawsuit and claim form covers gem-quality diamonds only. In addition, jewelry industry members who have questions about completing the form can contact JVC’s web hotline for help jvcquestions@aol.com. A link to the Direct Purchasers claim form will be posted on JVC’s website as soon as it is available.

Starting on December 28, 2007, a court authorized media campaign to notify consumer class members about making a claim will commerce. Advertisements in hundreds of newspapers, magazines (both trade and consumer) and on the radio will run until February 2008.

The Court also ordered that on December 28, 2007, written notice about the claim form will be mailed, first class, to approximately 50,000 entities covered under the lawsuit. Those who wish to file a claim will have until May 19, 2008 to submit a form. The claim form must be postmarked on or before May 19, 2008 for it to be accepted.

Said Cecilia Gardner, JVC’s president, CEO and general counsel: “The claim form is not difficult to complete, but it does require attention to detail and figures. JVC has posted on our Website both a link to the claim form and guidance on how to complete the form. As the guardian of ethics and integrity in the jewelry industry, JVC will help jewelers who have questions about completing the form.”

Visit JVC’s Website – http://www.jvclegal.org – for more information about the De Beers class action lawsuit claim form and guidance on completing it as well as JVC’s legal compliance products and services.

Jewelers Vigilance Committee, founded in 1917, is a not-for-profit legal trade association fulfilling its mission to maintain the jewelry industry’s highest ethical standards. JVC offers dispute mediation and arbitration services for trade and consumers, compliance monitoring and precious metals testing, among many other services. JVC, long considered the industry’s guardian of ethics and integrity, is a resource for the entire jewelry industry and its customers as well as an industry representative before government agencies, media and adjunct fields. For more information visit: http://www.jvclegal.org.

Diamonds worth Rs. 5 cr. 'stolen' from Panchratna building

Mumbai (PTI): Diamonds worth over Rs. 5 crores were allegedly stolen from south Mumbai’s Pancharatna building, the largest diamond hub in the country, police said on wednesday.

Some unidentified robbers managed to break into the office of Arshit Gems on the fifth floor of the building located in the Opera House area on the intervening night of October 15 and 16 and got away with the diamonds, they said.

A total of 21,700 karat of diamonds were stolen from the drawer of the office, a senior police official of the D B Marg police station said.

“It seems to be an insider’s job as the diamonds have been carefully stolen from the drawer in which they were kept without damaging other things. One of the five employees of the office is missing and we are checking the footage from building’s CCTV camera for clues,” he said.

Deputy Commissioner of Police (Zone II) Ramrao Pawar said the police are yet to ascertain the exact worth of the stolen goods but said they would cost anything between Rs five to ten crore.

The office was shut early by owner Hitesh Patel on the evening of October 15 as his father was leaving for US that day. He discovered the robbery on opening the shop yesterday morning and reported the matter to the police in the evening.

The police has registered it as a case of `house break-in’ on Wednesday after completing the necessary formalities.

The robbery comes barely days after three loaders of Air India were arrested for allegedly stealing gold ornaments and polished diamonds worth Rs 4.5 crores from the airport. All the stolen goods were recovered in the case.

Kimberley Diamond Unearths First Pink Stone At Ellendale

RAPAPORT… Kimberley Diamond Company, which is subject to a take-over bid by Gem Diamonds, has recovered the first pink diamond at its Ellendale Diamond Project in Western Australia.

The unique pink 1.58 carat stone was found at the Ellendale 4 property, and has an indicative value of at least $20,000 per carat in rough form, and up to $40,000 a carat once polished, the company said.

Ellendale has been more widely recognized for its production of yellow stones.
The company reported further “unusual recoveries” made at Ellendale in the past month, including a 10 carat white stone “almost totally covered in a calcite skin” at Ellendale 9, and a “circa 3 carat octahedral fancy yellow stone within a chunk of sandy tuff.”

Kimberley also said it had achieved the highest prices to date in recent sales, but did not provide sales figures.

“The upper end of the diamond market – which tended to be insulated against last year’s market fluctuations – continues to perform particularly strongly with record demand for better quality larger and specialty diamonds,” the company said in an October 11, 2007 statement. “This is strategically important for Kimberley, given that Ellendale produces a significant proportion of the world’s fancy yellow diamonds.”

In July, Gem Diamonds confirmed a $263 million offer for Kimberley Diamond and is awaiting approval of shareholders. Kimberley management said documents relating to the bid have been circulated to shareholders. The merger is expected to close by the end of 2007.

Kimberley Diamonds finds pink diamond

Kimberley Diamond Co NL has discovered the first pink diamond at its Ellendale project in Western Australia.

The rare diamond weighs in at 1.58 carats and has an indicative value of at least $US20,000 per carat in the rough.

When polished, its value increases to $US30,000 to $US40,000 per carat.

Kimberley Diamond has also discovered a 10 carat white diamond and a three carat octahedral fancy yellow stone.

“The upper end of the diamond market, which tended to be insulated against last years market fluctuations, continues to perform particularly strongly with record demand for better quality larger and specialty diamonds,” it said.

“This is strategically important for Kimberley, given that Ellendale produces a significant proportion of the world’s fancy yellow diamonds.”

Industry projections are for a positive long-term outlook, with diamond prices expected to keep rising.

Global demand for diamonds is set to exceed supply over the next 10 years, or until new deposits are found and reach the production stage.

Vienna: Investigators Baffled in Murder of Diamantaire

RAPAPORT… Police in Vienna, Austria, have made little progress investigating the September 27, 2007 murder of jeweller and diamantaire Werner Haas.

Haas, 46, was vice president and spokesman for Diamant-Club Wien. Hass was shot twice in his Vienna home office — one bullet hit Haas in the front and another in the back of his torso — in what was first believed to be a robbery.

But police have been unable to find a motive or suspects for the crime, despite pouring over the meticulous phone and computer records in the office.

“We know still nothing but we are continuing to work with the extensive data”, Kriminaldirektion lieutenant colonel Thomas Stecher told the German language daily Wiener Zeitung.

Some time between 7 a.m. and noon that day, police claim the assailant entered the premises without forced entry, leading investigators to believe the murderer was someone known to Haas, and was likely invited inside. While Haas was found dead next to his opened safe, with his wallet and credit card missing, valuable gemstones and pieces of jewelry were left in plain view. Police are still unsure if anything else was taken without the determination of a complete inventory audit by his partners.

Stecher told the German language Der Standard, that police had no offical statements regarding the motive, but that much could be learned once DNA and ballistic investigations were complete.

Stecher, however told the Wiener Zeitung that authorities were investigating “in all directions,” but that evidence pointed toward revenge or a “jealousy murder.”  The investigator said that police were concentrating on questioning the single man’s female acquaintances, as well as the 1,500 business contacts stored on his computer.

Jeweller and long time acquaintance Leopold Rössler told the Zeitung that he could not fathom such a thing happening to his friend. Rössler claimed Hass was very careful at work in protecting his safety, and a well-liked man with no enemies.

“Haas did not meet with anyone he did not have a date with or a reason to let in ,” he said. “Werner was a respectable business partner and liked on all sides by people,” he said.

The last person known to have spoken with Hass was quickly ruled out by investigators as a suspect. An unnamed friend, a sometimes golf partner from Slovenia, spoke with Hass around 7 a.m. via telephone from his country home.  Investigators also say Hass last accessed his computer at 8:30 a.m.

On the evening of October 4, 2007, Ernie Blom, president of the World Federation of Diamond Bourses expressed his dismay  and condolences through a press release.

“This is a senseless and outrageous tragedy,” he said. “Nothing that we do or handle could ever justify such as an act, and we hope that the Austrian police authorities will be able to bring the perpetrators to justice as soon as possible. Our hearts go out to Werner’s family and to his colleagues and friends at the Diamant-Club Wien,” Blom wrote.

Besides being the vice president and spokesman for the Vienna diamond bourse, Haas was the owner of De Haas Vienna, a jewelry house he co-founded in 1986 with EH Lugschitz Ronge, with offices in London and Japan. He was also a generous contributor to local charities and a frequent sponsor of golf tournaments, a game he was known to have a strong passion for.

Market Comments 6/10/2010

JCK Las Vegas fuels optimism for U.S. retail but buying at show still driven by Far East and Indian buyers. 3 ct certs hot. High prices for large diamonds generating buyer resistance. Good demand for 1-2 ct, G-I, VS-SI. Demand for SI-I1 very strong  for small inexpensive goods. DTC June sight estimated at $500m as prices increase 3-7%. Secondary market rough premiums softening but demand remains strong due to shortages. Large cutters dealing rough rather than manufacturing. Christie’s London sells $6.6m (79% by lot) with rectangular cut, 14.85-carat, D, VS1 Bulgari diamond ring selling for $1.1m ($73,800/ct). Michael Hill to close eight of 17 U.S. stores. Botswana’s April rough/polished exports +36% to $233.6m. Abbey Chikane says Zim meets minimum KP standards as NGOs still report state-sponsored human rights abuses.