The Johannesburg Magistrate's Court on August 10 granted the Special Investigating Unit (SIU) a warrant to conduct a search and seizure at the premises of diamond company Alexander Bay Diamonds – previously known as Scarlet Sky Investments – and related companies.
SIU investigators, with the assistance of the Hawks, raided the Alexander Bay offices, in Johannesburg, on August 11, seeking information and evidence that will assist with an ongoing investigation into the affairs of State-owned diamond mining company Alexkor.
The SIU was authorised by President Cyril Ramaphosa to investigate allegations of corruption and maladministration in respect of the marketing, valuation, sale and beneficiation of diamonds, pursuant to agreements concluded between Alexkor and service providers.
Alexander Bay was appointed by Alexkor in 2015 as an external service provider, to perform marketing, valuation, sales and beneficiation in respect of Alexkor diamonds.
The company was allegedly appointed to improve diamond sales, as Alexkor believed its diamonds were being sold at about 30% below market value prior to its agreement with Alexander Bay.
The circumstances and procurement process that followed and which led to the appointment of Alexander Bay are subject to the SIU investigation.
Alexander Bay has refused to disclose the identity and details surrounding the sale of diamonds to Alexkor and its CEO Lemogang Pitsoe, citing nondisclosure agreements signed with buyers of State diamonds. The company also failed to disclose the details around the sale of diamonds to the State Capture Commission.
The SIU deemed it necessary to approach the Johannesburg Magistrate's Court for a search warrant to seize documents and computers to assist with an ongoing investigation, as normal processes to request information were likely to be met with the same attitude.
The SIU received a tip-off from a whistle-blower that alleged serious maladministration in the affairs of Alexkor, in respect of the marketing, valuation, sale and beneficiation of diamonds. The raid of Alexander Bay offices was deemed crucial for the SIU to complete its investigation into the affairs of Alexkor.
The SIU is empowered by the Special Investigating Units and Special Tribunals Act to subpoena bank statements and cell phone records, search and seize evidence, and interrogate witnesses under oath to fully investigate allegations brought before it.
The SIU is also empowered to institute civil action in the High Court or a Special Tribunal in its name, to correct any wrongdoing uncovered during both investigations caused by acts of corruption, fraud or maladministration.
In line with the Act, the SIU will refer any evidence pointing to criminal conduct it uncovers to the National Prosecuting Authority for further action.