New York City sightholder Lazare Kaplan on Dec. 23 launched a long-threatened lawsuit against Antwerp Diamond Bank in United States district court, Southern District of New York.
The suit stems from a $135 million joint Angolan diamond deal the company undertook with another sightholder, Antwerp-based Israeli dealer Erez Daleyot, owner of D.D. Manufacturing. D.D. owns an interest in Jacob & Co., the brand begun by Jacob the Jeweler.
The complaint alleges that when the value of diamonds plummeted after the 2008 financial crisis, a possible Daleyot default threatened Antwerp Diamond Bank’s survival. As a result, ADB, which was also LKI’s banker, allegedly worked with Daleyot to steal the goods in question, using a series of financial transactions that involved moving funds from one shell company to another. The 136-page lawsuit also includes charges of bribes and two sets of books.
LKI, which is seeking $500 million in damages, says the loss left it unable to file financial reports, which led to its Nasdaq delisting. ADB had not filed a response at press time, but a statement from the bank and parent company KBC called the suit “without merit.”
The suit could “draw the attention of U.S., Belgium, and Israel authorities, which will prove problematic,” one longtime industry observer tells JCK. “Financing to this industry will be further constrained.”
While LKI has not provided financial reports for two years due to the “material uncertainties” caused by the situation, it did note in its latest SEC filing that its sales fell in the six months ending Nov. 30 to $59 million from $62 million the prior year.
Big Blue Marvel
Courtesy of Petra Diamonds
Petra’s Star of Josephine
In December, Petra Diamonds set a record when it sold a 4.8 ct. piece of blue rough from the Cullinan mine in South Africa for $1.45 million—more than $300,000 per carat. That’s the highest per-carat price Petra ever achieved for a piece of rough. It’s not Petra’s first news-worthy blue. The Star of Josephine, a 7 ct. flawless, fancy vivid blue stone, was discovered in the Cullinan mine in 2009.