Israeli Billionaire Denies Selling Stake in Diacor Diamond Dealer

Sources say Beny Steinmetz offloaded his stake to his brothers to rid the company of bad publicity surrounding another deal.

Israeli billionaire Beny Steinmetz on Monday denied that he has sold his stake in Diacor International to his brothers in a bid to preserve the company’s large diamond purchasing allotment with mining giant De Beers.

According to industry sources, Steinmetz offloaded his Diacor stake to rid the company of the bad publicity surrounding allegations of an improper mining deal at another company, Beny Steinmetz Group Resources.

A spokesman for Steinmetz, however, denied the Diacor sale and any allegations of illegal conduct in any of Steinmetz’s mining deals.

Diacor is a part of the Steinmetz Diamond Group, considered one of De Beers’ largest diamond dealers. According to industry sources, Diacor buys between $30 million and $50 million annually in rough diamonds.

De Beers holds 45% of the world’s rough diamonds. It sells its diamonds to authorized bulk purchasers on a list maintained by the Diamond Trading Company, which it controls. Companies on DTC’s list are called sightholders, and their purchase quotas are called sights. These bulk purchases then sell the diamonds on to diamond polishers.

Steinmetz’s rise to become one of the world’s largest diamond dealers has been attributed to his relationship with the former owners of De Beers, the Oppenheimer family. After the Oppenheimers sold their stake to global miner Anglo American Plc two years ago, De Beers maintained its relationship with Steinmetz.

Industry sources attribute a Diacor sale to allegations against Beny Steinmetz Group Resources in the African country of Guinea, Britain and the United States. The company is being investigated on allegations of bribing government officials for mining rights at a site in Guinea with natural-resource despots estimated worth billions of shekels.

The sources said De Beers would have a hard time maintaining a sight for someone caught up in such allegations.

The spokesman added that the allegations regarding the Guinea mining deal were part of a smear campaign by Guinea’s president to expropriate Beny Steinmetz Group Resources’ legally acquired mining interests in the country.

Ori Berkwitz