Kimberley Diamonds’ shares fall as former chairperson arrested

16th September 2015 By: Creamer Media Reporter

JOHANNESBURG ( – ASX-listed Kimberley Diamonds’ share price fell by nearly 24% on Wednesday, after the Australian Securities and Investments Commission (ASIC) announced that the company’s former CEO and executive chairperson Alexandre Alexander had been arrested and charged for allegedly issuing false information to the market.

His arrest by the Australian Federal Police at the Sydney airport on Wednesday followed an investigation by the ASIC. He was charged with four offences under the Corporations Act relating to false and misleading statements allegedly made by Kimberley Diamonds to the ASX between October 2013 and March 2014.

It was alleged that the statements, which related to the company’s future earnings forecasts and which were authorised by Alexander, were false and misleading because they failed to disclose the fact that they assumed that the company would obtain a 30% increase in the price that Kimberley Diamonds would receive for its rare yellow diamonds in the last quarter of the 2014 financial year.

Alexander appeared in court and was granted bail subject to strict travel restrictions and that he surrender his passport to ASIC.

The matter was adjourned and would return to Sydney’s Downing Centre Local Court on November 10.

Each charge carried a maximum penalty of five years in jail and/or a A$34 000 fine.

Kimberley Diamonds noted in a statement that Alexander denied the allegations and that he would defend the charges.

The diamond miner has assets in Australia, Botswana and Spain.

Its main diamond producing mine, in Ellendale, in Western Australia, was the world’s leading source of rare yellow diamonds, with the diamonds sold to Laurelton Diamonds Inc, a subsidiary of Tiffany & Co.

Between March 2013 and May 2014, Kimberley Diamonds had been in negotiations with Tiffany & Co aimed at increasing the price that Kimberley Diamonds would be paid for its diamonds.

On May 12, 2014, Kimberley Diamonds announced to the market that price increase negotiations with Tiffany & Co had failed and, consequently, the company’s earnings forecast for the last quarter of the 2014 financial year was revised down from $7.5-million to $1.5-million. The price of Kimberley Diamonds’ shares fell by 41.5% following the announcement.

On July 1, 2015 Kimberley Diamonds announced that Kimberley Diamonds Company, a wholly owned subsidiary of Kimberley Diamonds, and the owners of the diamond mine at Ellendale, had been placed into voluntary administration.