Luxury Jeweler De Grisogono Files for Bankruptcy Following Luanda Leaks

Jewelry
29/01/2020 11:22

Swiss luxury jeweler de Grisogono, whose long-alleged history of shady deals with Angola was recently exposed by the International Consortium of Investigative Journalists (ICIJ) and 36 media partners, has filed for bankruptcy in Geneva, according to multiple news outlets. The jeweler is owned in part by the husband of Isabel dos Santos, the billionaire daughter of former president José Eduardo dos Santos, who is facing allegations of having pilfered Angolan state-owned companies. The company owes more than 1.4 million francs to its Swiss suppliers and is facing insolvency.

De Grisogono has been in negotiations about a takeover for several months, the company said in a brief statement on Wednesday morning, but have failed to secure a buyer. The failed negotiations forced the company to file for creditor protection with Swiss authorities which, if accepted, will affect 65 jobs in Switzerland, the company said.

To recap the 'Luanda Leaks': Ten days ago, the publication of hundreds of thousands of documents by the International Consortium of Investigative Journalists (ICIJ) alleged that jewelry brand de Grisogono was funded by money siphoned from the Angolan government through a series of shell companies connected to Isabel dos Santos and her husband, Sindika Dokolo. The files demonstrated that De Grisogono had gobbled up more than $140 million public money from Angola - whose capital is Luanda. The Luanda Leaks helped reveal how Isabel dos Santos had built her fortune with public funds, some of which was invested, at a loss, in jewelry. As Angola is no longer interested in bailing the jeweler out, the Geneva company could no longer keep their heads above water.

The de Grisogono story is a cautionary tale of squandering state resources. De Grisogono had fallen on hard times during the global economic crisis. In 2012, a search for investors to take on the debt and restructure the business led to Angola and a partnership between Angolan state-owned diamond company Sodiam and Melbourne Investments, a private business owned by dos Santos’ husband Dokolo. Sodiam was instrumental in financing the De Grisogono investment, exposing itself to huge loans to pay for the purchase of the company and its ongoing support. Concern about this arrangement was expressed in an announcement by the country’s government saying it was freezing the couple’s assets, and accusing them of making, and hiding, money at the state’s expense.

A decree included claimed that Sodiam is owed $147m for loans used to prop up De Grisogono, money it borrowed from a bank linked to Dos Santos at a 9% interest rate. It also alleged that Dokolo and Dos Santos bought diamonds from the state at below market value via several companies linked to Isabel dos Santos and her husband, which were given the status of “preferential buyer” with Sodiam. The prosecutors claim these companies were able to keep the profits from the sales, while the Angolan state lost out. The 'preferential buyer' system has been an open secret for years in the Angolan diamond industry, one that President Lourenço set out to abolish by opening up Angola's diamond sales to the international market. It is generally accepted in the industry that Sodiam undersold their rough diamonds to their ‘friends’ – whether De Grisogono, Victoria Limited or traders in a diamond trading centre that does not check the value of a diamond upon import – thereby facilitating a healthy profit to select, connected companies.