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THE DIAMOND JEWELRY MARKETS

HIGH-END SWISS DIAMOND JEWELRY COMPANY GOES BELLY UP AS ONE OF AFRICA’S WEALTHIEST COUPLES FACE GRAFT CHARGES

 

Within the most exclusive echelons of diamond jewelry collectors the name De Grisogono was something of an enigma. A Geneva-based jewelry house, it had been founded in 1993 by former Bulgari executive, Fawaz Gruosi, an Italian of Lebanese origin. At the time he promised customers an offering of exclusive works of art and black-diamond jewelry. The company’s name, which is rooted in both the Latin word “Chrysogonus” and the and Greek word “Chrysogonos,” means “begotten of gold”.

But in January 28, 2020, the company filed for bankruptcy protection in Switzerland. This came after a series of investigative reports linking it shell companies controlled by Isabel dos Santos, the daughter of Angola’s former president and reportedly Africa’s wealthiest woman, and her husband, Sindika Dokolo, a Congolese art collector and businessman.

It’s a scandal that threatens to expose corruption at the highest level in one of the world’s largest diamond-producing countries, Angola, whose government is currently saying that if nothing is resolved it could be left holding a bill of about $200 million.

FOLLOWING THE MONEY

While De Grisogono does not have the name recognition value of a Cartier or Tiffany, it was well known to many of the world’s A-listers. Its annual party at the Cannes film festival, where celebrities got to wear the diamond necklaces the company produces, among them Selma Hayek, Naomi Campbell, Sharon Stone, Rihanna and Natalie Portman, was always a high-profile affair.

In 2012, Dos Santos and Dokolo acquired a stake in the company, forming a Maltese-based corporation and subsidiary to manage the deal. 

But, according to  press reports, Sodiam, the Angolan national diamond company that is officially in charge of controlling and supervising the purchase, sale, export and import of diamonds in the country, put up the money to finance the investment, and then relinquished all control to Dokolo in managing the business.

The high-powered African couple at the heart of the De Grisogono scandal, Isabel dos Santos and her husband, Sindika Dokolo.

Documents released to the press indicate that Dos Santos and Dokolo co-owned the two Maltese companies, Victoria Holding Limited and the subsidiary, Victoria Limited, which took over De Grisogono Luxembourg parent, DG Holding, buying out an existing debt and investing money into the company.

Victoria Holding Limited was said to a 50/50 venture between the couple and Sodiam, but the documents suggest Sodiam provided almost all of the funds. At most Dokolo is thought to have put in about $4 million, although it is a charge that he disputes.

What also appears to be the case is that Sodiam’s investment was itself financed by a loan taken from Banco Bic, an Angolan bank that is part-owned by Dos Santos. The interest rate was a hefty 9 percent, and whole transaction was guaranteed by the Angolan state treasury. For Africa’s richest woman, one way or another, her bets were covered.

The De Grisogono necklace, Set with a rectangular cut-cornered diamond, weighing approximately 163.41 carats, with its chain featuring rectangular cut-cornered diamond and pavé-set emeralds.

THE YEAR THAT IT BEGAN TO UNRAVEL 

The year 2017 proved to be a challenging for De Grisogono. José Eduardo dos Santos, Isabel’s father, stepped down as president of Angola. Soon thereafter, the new Sodiam management let it be known that it wished to withdraw from the jewelry company for “reasons of public interest.”

Then there was De Grisogono necklace, which included a 163.41-carat centerpiece and was auctioned for $34 million. It was cut from a 404-carat rough diamond mined in Angola.

Question are being asked about how the diamond was acquired. Angolan state prosecutors allege that Sodiam had been instructed to offer the giant piece of rough at below market value to “preferential buyers,” which evidently were Dos Santos and Dokolo. They also said that were able to keep the profits from the sales. This too is a claim rejected by Dokolo.

The prosecutors’ investigation is part of a larger probe into the affairs of Dos Santos and Dokolo, where it is alleged that they have been involved in illegal transactions that have cost the state an estimated $1.14 billion.

For its part, the jewelry company has been looking for a buyer to extricate it from its predicament, but to no avail, leading to the recent request from the Swiss courts for bankruptcy protection from its creditors. 

“Without financial support from the current shareholders, and without a new investor, unfortunately the company cannot continue as a going concern,” the De Grisogono has said in a statement, noting that it if protection is granted it will implement a “mass redundancy procedure” immediately, effectively leading to the dismissal of all 65 employees in Switzerland. 

The fate of De Grisogono’s international network of boutiques, in places as far flung as Paris, New York“>New York, Armenia, Moldova, the Ukraine, and unsurprisingly Malta, is not yet known.