Share on Google Plus Share on Twitter Share on Facebook 2 Share on LinkedIn Share on PInterest 1 Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend (3 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Article Stats   2 comments

OpEdNews Op Eds

$83-million diamond default: Sotheby's and Israeli war crimes

By (about the author)     Permalink       (Page 1 of 2 pages)
Related Topic(s): ; ; ; , Add Tags Add to My Group(s)

Interesting 3   Must Read 2   News 1  
View Ratings | Rate It

opednews.com

Last November, amid a fanfare of international publicity, Sotheby's achieved a world record $83 million for a pink diamond auctioned in Geneva. Four months later, on February 27, Sotheby's disclosed that they were forced to take the diamond, they then valued at $73 million, into their inventory when the consortium of investors led by Isaac Wolf, a New York diamond cutter, defaulted.

There is a lot about this story that doesn't add up; key questions remain unanswered leading to the suspicion of a cover-up.

A brief, but significant new "Risk Factor" included in Sotheby's Form 10-K Annual Report on February 27, 2014, may offer a clue to this turn of events. It warns: "Sotheby's could be exposed to reputational harm as a result of wrongful actions by certain third parties. Sotheby's is involved in various business arrangements and ventures with unaffiliated third parties. Wrongful actions by such parties could harm Sotheby's brand and reputation."

Sotheby's has not explained why they felt it necessary to include this previously unreported risk factor.


Human rights activists protest outside Sotheby's New Bond Street outlet in London, March 2013
(image by Inminds)

According to numerous media reports Sotheby's claimed the buyer of the pink diamond "couldn't pay and defaulted". Isaac Wolf has not given any interviews or responded publicly since the news broke at the end of February.

When asked by JCK magazine why the diamond wasn't sold to one of three under bidders, Sotheby's "declined to comment".

It is difficult to believe that the investors - "financial people" according to Wolf - would have pursued such a high-profile target without having sufficient funds or credit available to complete the deal.

The consortium would, presumably, have researched and carefully planned their strategy prior to participating in what was certain to be a highly publicised auction. We know from a televised interview given by Wolf after the auction that the investors valued the diamond, which was crafted by the Steinmetz Diamond Group - a Beny Steinmetz Group Resources (BSGR) company - at $150 million. The consortium would, therefore, have known how much they could bid and how much each member needed to contribute and still "make a big profit", as alluded to by Wolf.

According to their own calculations, the consortium stood to make a profit of $67 million. If financing the deal was the problem, why couldn't these "financial people" raise the funds or get another investor to partake in such a potentially lucrative transaction?

Given that three under bidders competed to acquire this unique diamond, forcing the price well beyond it pre-auction $60 million estimate, why did none of them step in to acquire the diamond?

The lack of a more detailed explanation from Sotheby's, Wolf and the other bidders raises the question - have investors been spooked by information in the public domain linking BSGR with Israeli human-rights violations, information that leads many people to believe BSGR diamonds are de-facto blood diamonds?

Diamonds that are associated with gross human-rights violations would not be a good "hedge against inflation and devaluation of currencies" which is what the investors sought. Wolf described the diamond, originally known as the Steinmetz Pink, as "a fantastic hedge".

It is likely that the inclusion of the previously unreported risk factor in Sotheby's Securities and Exchange Commission (SEC) Form 10-K filing was spurred by information published in 2013 and detailed in a letter and email sent to Sotheby's for the attention of William F. Ruprecht, President and Chief Executive Officer, and members of the Board of Directors in January 2013.

That letter warned of the potential reputational damage to Sotheby's as a result of their "unique partnership" with the Steinmetz Diamond Group, which, through the Steinmetz Foundation, funds and supports a unit of the Givati Brigade of the Israeli military.

The Givati Brigade was responsible for the massacre of at least 21 members of the Samouni family in Gaza, a suspected war crime documented by the UN Human Rights Commission, Amnesty International, Human Rights Watch and B'tselem.

Next Page  1  |  2

 

A human rights activists from Ireland with a particular interest in the Israeli/Palestinian conflict and the global trade in diamonds which are a major source of funding for the Israeli military regime.

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon

The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Follow Me on Twitter

Contact Author Contact Editor View Authors' Articles
Related Topic(s): ; ; ; , Add Tags

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Israel's greatest fear - its diamond trade exposed

Israeli blood diamond agreement scuppered by BDS activists

Hollywood blinded by the Bling - Diamonds are for Never

Are Sotheby's Steinmetz diamonds blood diamonds?

Israeli Authorities drop a major fraud investigation to protect the Israeli Diamond Industry

Diamond industry spin conceals on-going trade in Blood Diamonds

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
2 people are discussing this page, with 2 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

Sotheby's were informed well in advance that their... by Seán Clinton on Friday, Apr 11, 2014 at 11:35:51 AM
Don't buy diamonds. They are a royal ripoff. DeBee... by intotheabyss on Friday, Apr 11, 2014 at 7:29:19 PM