Rob Bates

Jayam Vs. DTC: The Juicy Parts
March 19, 2007

Some notes after reading several hundred pages of transcripts of the Jayam vs. DTC court case.  First off, and this isn’t exactly an earth-shaking observation, it’s amazing how much mistrust there is between the DTC and its sightholders, even though they’ve sometimes done business with each other for generations.

The DTC, for example, admits that the reason it enacted its “capping” mechanism was to prevent sightholders from “gaming” their profiles – basically, inflating requests artificially to get more goods. A DTC witness later says “gaming” is one of the biggest issues they are grappling with in the Supplier of Choice system.

As for what one sightholder thinks of the DTC, here are some excepts from the cross-examination of Jayam head Mahendra Mehta:

DTC is in constant dialogue [with sightholders], that I agree. But not necessarily they listen to the clients ... They come always with their mind made up and that is how it is...Lately it has been a one-way street. ...Heads they win, tails I lose. ... Nobody can stop them ... They are a dominant power. They can do what they like. It is an unequal battle.

Later he is asked:

DTC Lawyer: So you think [the DTC is] just a bunch of dishonest people, is that what it comes to?

Mehta: Well that is the word you can use. I cannot use that.

Mehta later charges that the DTC prepared a sight box for him that they knew he would refuse, and says “for sure” other sightholders put false information on their profiles. It later comes out that Mehta left a message on the answering machine of a former DTC sales director, warning that market rumors about the director “might be investigated” if the Jayam litigation comes to court. Mehta apologized for this.

(It should be noted that Mehta’s testimony seems to have struck a wrong chord with the trial judge, who wrote in his verdict that he thinks Mehta “has become obsessed with his quarrel with the DTC, and allowed it to warp his better judgment.”)

The DTC also had its rough moments: In Charles Wyndham’s favorite part of the transcript, the DTC admits initially supplying wrong information to the Ombudsman. The DTC witness, Howard Davies, called it an “oversight.” (The full transcript of this part can be seen here.)

None of this is too surprising – litigation has a way of making everyone look bad. But it is unfortunate that, years after SoC was supposed to bring about a new transparent, more trustworthy diamond industry, we still see spectacles like this.

Posted by Rob Bates on March 19, 2007 | Comments (0)