Israel's Diamond Industry in Turmoil as Flaws Show in Power Struggle

Ora Coren
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Ora Coren

The Israeli diamond industry is in turmoil over a struggle for control of its major institutions. The controversy erupted over the weekend in connection with the activities of a committee appointed by the president of the Israel Diamond Manufacturers Association, leading to the replacement of three of the association’s directors, including two senior figures former president Uri Schwartz and diamond merchant Elliot Tannenbaum.

Sources in the industry say matters reached a peak due to President Abraham (Bumi) Traub’s efforts to transfer funds from the local Diamond Institute a nonprofit with a budget of NIS 20 million to NIS 25 million a year a nonprofit with a budget of NIS 20 million to NIS 25 million  year - to the Diamond Manufacturers Association, which is running a deficit.

The replacement of the directors surprised the industry, because the invitation to the committee meeting made reference to the appointment of directors rather than their replacement.

Sources say efforts to transfer funds to the manufacturing association are to cover its day-to-day operations and would be used for projects that do not serve the industry as a whole.

An executive committee, including Schwartz and the Industry, Trade and Labor Ministry’s diamond controller Shmuel Mordechai, was convened about six months ago to look into the policy of transferring funds from the institute to the association. The committee concluded that any money transferred had to benefit the entire industry.

Schwartz, who was apparently surprised by his ouster from the leadership of the association, told associates that he will seek Traub’s exit from the institute’s board of directors on the grounds that he is wanted by Interpol in connection with activities in Russia.

Traub denies that he is wanted by Interpol, although he now appears on a list of the organization’s wanted suspects. Traub also denied seeking to have money transferred for day-to-day operation of the association.

The Ramat Gan Diamond Exchange. Credit: Haim Taragan

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