DTC Lifts Sightholder Suspensions

By Rob Bates -- JCK Online, April 1, 2008

It was considered the first big test of De Beers' Best Practice Principles ethical code, but it ended with a puzzling about-face.

At the beginning of the year, De Beers suspended six sightholders, all Indian-owned firms based in Antwerp, Belgium, for their role in what is known as the Brenig case. Gerald Brenig, a former diamond trader, received two years in jail for his role in a scheme involving falsified diamond invoices, according to local press accounts. Thirteen diamond companies were said to be involved in the scheme, including the six sightholders. Employees of those companies received suspended nine-month jail sentences, reports say.

The suspension was widely seen as a first step in removing the sightholders from the DTC's rolls. But, after meeting with the sightholders and their lawyer, the DTC has rescinded the suspension, and the sightholders are back on the list, according to De Beers spokeswoman Louise Prior.

“I cannot go into detail, but suffice to say that all discussions [with the sightholders] resulted in our reinstating supply,” she told JCK. “Part of the information we now understand is that there were no criminal judgments against any past or present sightholder group company. The companies named in the Brenig judgment had in every case come to a civil settlement with the Belgian tax and customs authorities.

“There were cases in which there were criminal judgments against individuals with direct or indirect links to sightholder group companies,” she continued. “In every such case, the sightholders concerned have taken, or are taking, swift action to remove these individuals from all positions of influence within the management and directorate of their sightholder group.”

Some argued that the suspensions should not stand, since the alleged infractions took place in the 1990s, before the BPP policy was put into place (in 2003). But Prior denied there was a BPP cutoff.

The suspended sightholders' lawyer, Suresh Surana, told the Indian newspaper The Hindu that the suspension was lifted because the sightholders “clarified to the DTC that none of the Indian sightholders or their directors and shareholders have been involved in the Belgian legal matter, and [we] supported our stand with documentary evidence.”