Diamonds / Industry

HRD Lab Routinely “Upgraded” Diamonds, Report Claims


Belgian authorities have opened an investigation of local lab HRD Antwerp, according to local newspaper De Tijd, which claimed to have seen internal communications that assert the lab routinely “upgraded” grades on its reports.

The charges stemmed from a court case between HRD and its former Turkish partner, Enstitü İstanbul Bilim Akademisi Yönetim Danişmanliği, which co-owned HRD Istanbul and HRD Dubai for seven years until October 2021, the newspaper said.

“Shortly after the split, the former Turkish partner filed a civil suit against HRD Antwerp at the Antwerp court,” the newspaper wrote.

As part of the suit, the former partner alleged that “diamonds with a previous rating by the U.S. competitor GIA … were [given] one to two upgrades in color,” and a one-grade bump in clarity, the newspaper claimed.

According to De Tijd, HRD Istanbul’s then-director Mike Davey complained in internal communications about a new HRD grading “protocol,” which, he claimed, involved “practically automatic double upgrades.

“This not a procedure,” he said, according to the newspaper. “It is a way to commit market fraud. It’s just something we’re not supposed to do. And we certainly shouldn’t put it down on paper. If we continue to do this and constantly devalue [HRD’s] name, we will go down the tubes.”

Mehmet-Can Ozdemir, a co-owner of the HRD’s Turkish branch, reportedly agreed: “Valuing diamonds involves a certain degree of subjectivity. If things are really tight, graders can go higher or lower. But that is never about one full degree. In our scenario we immediately jump up two.”

The newspaper also said an internal audit report had found a “significant differences” in grades at HRD Mumbai and its other branches.

HRD Antwerp CEO Ellen Joncheere warned in internal communications that “if we move to different, stricter standards than those of GIA or even stricter, we [will have to] close down the company,” according to the newspaper account.

Asked for a response, an HRD spokesperson tells JCK: “We regret that the information about the former Turkish partnership of HRD Antwerp has leaked to the press, seeing that this legal dispute is still ongoing.

“We have clearly stated our case in the first summary judgment. HRD Antwerp did receive a favorable outcome in that summary judgment and we are confident that we will be successful in further proceedings. As long as this case is ongoing, we respect the court rules and will not comment any further.”

A spokesperson for Belgium’s public prosecutor tells JCK: “I can confirm that there is an investigation ongoing after a complaint of a firm. No more comments in this phase.”

Joncheree, who took over the lab in 2020, reportedly told De Tijd: “There is no uniform, internationally recognized grading standard for diamonds.… As a result, each company that grades diamonds has its own unique standard. Each certification lab has its own emphasis. These different standards and their specific accents are transparent and perfectly known in the market. To date, no customer of HRD or any other diamond company has ever formally filed a complaint about it.”

Photo: Getty Images

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By: Rob Bates

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