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Botswana gems seized in Belgium deal gone sour

A parcel of 53,000 carats from the closed Lerala Mine has been seized in Belgium, after government intercepted what it suspects was an attempt by the mineís Australian owners to spirit the stones out of reach of creditors.

Lerala Mine, in the Tswapong area, closed at the end of May after its Australian owner, Kimberly Diamonds ran out of operational cash citing weak sales. At least 130 workers lost their jobs, with a few others retained for care and maintenance activities.

According to documents seen by Mmegi, the sale of the 53,000 carats was initiated on May 28, 2017 through a company in which Kimberly’s majority shareholder holds a major stake. The company was to auction the stones in Antwerp, having acquired them from Kimberly at US$22 per carat, an amount creditors believe was purposefully below value as a prior sale at Lerala had fetched prices of US$45 per carat.

The following day, May 29, Kimberly Diamonds told its workers operations were stopping due to lack of cash flow, resulting in 130 employees being escorted off the premises in Lerala village.

In the aftermath of the closure, however, provisional liquidator, Kopanang Thekiso grew suspicious of the transaction and values involved, roping in the Department of Mines and eventually leading to government successfully stopping the auction in Belgium.

The diamonds are currently being held in trust, while government and Kimberly lawyers lock horns in Antwerp. Government and the creditors want the sale voided and a fresh sale done to extract proper value from the stones for distribution.

“So far, the actions taken in Antwerp have been able to stop the auction from going through and the diamonds impounded pending the Botswana government presenting the facts of their case to the Belgian courts,” Thekiso wrote in a brief to creditors.

Creditors believe the transaction was engineered to spirit away the parcel of diamonds out of reach of claims by creditors. They point to the fact that the company involved is majority owned by Kimberly’s main shareholder and that an impression was created prior to the Mine’s closure, that the diamonds had already been auctioned.

Yesterday, Thekiso told Mmegi that

creditors were banking on government to successfully litigate, as the cost of creditors’ joining the legal battle in Antwerp had proved too high.

Thekiso said creditors would be pushing for the voidance of the sale, a move that if granted by courts, would enable the sale to be restarted from scratch.

“Where we are now is waiting to see what government will come out with in Antwerp,” he said.

“The diamonds were sold grossly undervalued and that suggests they were going for a transaction to take the stones away from other creditors of the Mine.”

Another diamond trading company in which Kimberly Diamonds’ majority shareholder has a controlling stake in, has since offered to pay government US$100,000 for unpaid royalties and US$250,000 for workers packages in return for withdrawing the court case.

It is unclear whether the government has considered the proposal as Minerals Minister, Sadique Kebonang was unavailable for comment yesterday afternoon. However, insiders in the matter say government has snubbed the offer.

Representatives of the axed workers, meanwhile are increasingly restless as packages have not been paid and few developments have been made in the matter since the Mine’s closure last year.

“We have not heard anything,” Botswana Mine Workers Union general secretary, Moffat Ramokate told Mmegi yesterday.

“We are in contact with the affected workers and they are still holding hope that we will be able to help them get something for their packages. It’s an issue we are actively pursuing.”

Efforts to contact Kimberly representatives were fruitless by press time yesterday.

Lerala has a troubled history, having shut down in February 2009 and July 2012.

Reports from the ground zero in May described a scene of chaos as scores of workers scrambled to source funds to move out of the mine compound, or out of their rented accommodation in the village.

Landlords reportedly held onto former workers’ assets, locking these in their homes in exchange of outstanding dues.




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