Diamond war reaches new levels

Lawrence Seretse | Friday March 7, 2014 17:30

 

Dismissed employees have dragged the company to court over unpaid salaries and unfair dismissal. Employees were sent packing and others transferred to Motiganz Diamond Group. Insiders have argued that Erez Dalyot of D.D Manufacturing N.V, bitter since losing a court case, masterminded the plot to topple the company.  Mmegi is in possession of a letter that was issued to 15 employees of Life Diamonds Botswana beginning of February. The letter confirms to the employees that,

“Effectively from February 10 2014 the company will close down production until further notice.  All employees will therefore be notified on when to report for duty. However, rest assured that this will not affect your jobs and salaries,” the letter reads. 

The disgruntled employees said that their December salaries were paid to them in mid January, and January salaries in mid February, while they are yet to receive their February salary.

They pointed out that the General Manager, Arik Paz signed and issued them with the letter and informed them not to show up for work until further notice.

Mmegi has it in good confidence that the 20% shareholder and director of Life Diamonds Botswana, Anthony Siwawa has denied any knowledge of such an arrangement.  However, on Tuesday evening the rest of the auxiliary staff (cleaners and receptionists), were told to leave the premises as the building was going to be locked down. Upon visiting the company premises yesterday, Mmegi learnt that indeed none of the employees were at work, even the General Manager, Paz himself. On Wednesday all the company contact numbers rang unanswered throughout the day.  Life Diamonds Botswana employees told Mmegi that Dalyot, who holds dual Belgian and Israeli nationality, got his people to remove some equipment from the company factory on Tuesday night.  However, according to the Tel Aviv share transfer agreement, Dalyot had ceased to hold shares and therefore removing company equipment from the factory could be tantamount to a criminal offence.

Alon Arabov, the controlling shareholder and director in Life Diamonds Botswana through his Israeli based Arabov Group Ltd, said he was not aware of the factory closure or the dismissal of employees.  “He said it was the first time he heard about the closing of the factory through your article. It quite disturbed him since there has not been any decision by the board of directors of the company to dismiss workers or close the factory,” a source close to Arabov informed Mmegi.

A high profile insider at Life Diamonds Botswana has also pointed out that the formal dismissal letter, which bears the Life Diamonds Botswana stamp and signed by Paz may have been counterfeit. “Arik Paz does not sign like that,” he said through a phone while confirming seeing the letter.

Further more, they said Paz was just an employee of the company and such a dismissal letter cannot be issued without board approval.

“This raises the validity of the letter and the ‘strength’ of the undertaking by Paz that salaries would be paid.”

Interestingly, if allegations that Dalyot ordered equipment to be removed from the Life Diamonds offices are anything to go by, then, in essence, Faz’s letter that production will resume and employees would not lose their jobs is invalidated. The Israeli based diamond guru, Arabov, is still giving assurance that the payment of salaries to employees will be done, despite the fact that his company might end up at the Gaborone Industrial Court on April 9.

 

Motiganz

The February 2013 Tel Aviv shareholder agreement where Dalyot offered to withdraw his shareholding from LDB making Arobov and Gil Goshen (Arabov Group) the largest controlling shareholders, was the birth of this whole messy situation.

After signing the agreement Dalyot later disputed the share transfer and in his defence in court, argues that conditions pertaining to the share transfer agreement were not met and therefore invalidated his transfer of shares.

He says he still holds a 40% ownership in Life Diamonds Botswana.  As a result of this fiery war, Life Diamonds Botswana lost De Beers sights in December and may risk being blacklisted if they miss the second and third sights.

In the meantime, Mmegi is well informed that Dalyot has contracted Motiganz Diamond Group to process the diamonds.

Life Diamonds Botswana has purchased diamonds in the past and the De Beers ban does not prevent it from continuing to cut and polish with other companies. The ban only applies to the contesting and awarding of sights.

Moti Ganz confirmed to Mmegi that he was presently cutting and polishing diamonds on behalf of Life Diamonds on a contracting basis.

 “The diamonds and the polished output remain the property of Life Diamonds. It is quite customary in the diamond industry for one company to use some of its capacity to process goods for a colleague,” he said.

Ganz expressed his satisfaction on his company’s factory, Motiganz, adding that he has no intention to take over any factory or company.

He argued that Motiganz’s offer to process diamonds and employ some of Life Diamonds staff should be seen in a good light.

However, a few things do not fall in place with this picture.  Why would Dalyot and his confidante’ Paz have diamonds manufactured at another factory while sending Life Diamonds factory workers home? Why is it that some Life Diamonds employees have been sent to Motiganz? They could not be drawn to respond to these questions as their office lines rang unanswered and a courtesy visit to the offices bore no fruit.