Former Kimberley Diamonds CEO Arrested for Misleading Market

Finance and Trade
16/09/2015 10:24

Alexandre Alexander, former CEO of Kimberley Diamonds (KD), whose former Ellendale mine in Australia was famous for producing approximately half of the world's supply of rare yellow diamonds, has been arrested at Sydney Airport, accused of misleading the stock market. He has been charged with four counts of making false and misleading statements to the Australian Securities Exchange (ASX) between October 2013 and March 2014. Each charge carries a maximum penalty of five years' jail and a $34,000 fine.

ASIC is alleging Alexander authorised market statements that failed to disclose the fact that KD assumed it would obtain a 30% increase in the price of its rare fancy yellow diamonds. Between March 2013 and May 2014, KD tried to negotiate an increase in the price of the yellow diamonds it sold to the luxury jewelry retailer Tiffany & Co. But the company's shares fell by 41.5 % and its revised earnings dropped from $7.5 million to $1.5 million when those negotiations stalled in May 2014. In 2015, KD closed the Ellendale mine, leaving a trail of destruction behind in the process.