De Beers reduces African Diamonds stake

Finance

Publishing Date: 10 Mar 2010 3:50pm GMT
Author: Mining Journal

African Diamonds Ltd says it believes that De Beers Group, the world's largest diamond producer, has breached Financial Services Authority (FSA) rules by not informing the company of a share sale.

"The board of African Diamonds have been informed by their registrars that 1 million shares in an account we believe to be controlled by De Beers have been sold or transferred without the company being notified," said an African Diamonds statement.

FSA rules state that equity owners must inform companies when their stakes breach percentage-point holding levels. African Diamonds says the account in question has reduced its stake from 5.8% to 4.49%.

The company's chairman, John Teeling described the sale as "disappointing" and "strange". He added that "In recent weeks, a senior director of De Beers turned down an offer to sell their block at a price significantly higher than the prices they obtained in the market. Subsequently, other approaches were made to De Beers' executives to sell their shares, with no response."

In November last year, De Beers sold its 71% interest in the AK6 kimberlite in Botswana to Lucara Diamond Corp. African Diamonds, the other partner on the asset, brokered the deal.