De Beers Nears Settlement With U.S.

February 24, 2004

De Beers Nears Settlement With U.S.

Discussions between De Beers and the U.S. government to settle a 1994 price fixing charge are at an "advanced stage" according to a report in The Wall Street Journal on Feb. 24. De Beers reportedly signaled it might agree to plead guilty and pay a fine to end the suit, say sources close to the situation.

The company has tried to resolve the price fixing charge for some time. Managing Director Gary Ralfe announced at a Feb. 5 press conference that the group wanted to settle all complaints – private and public – filed against it as soon as possible. De Beers is working to clear the way for it to do business legally in the U.S., which the U.S. government suit has prevented. It has plans to open retail stores in New York City and Los Angeles using the De Beers name, as part of a venture with LVMH Moet Hennessy Louis Vuitton. De Beers LV, the joint venture, already opened outlets in London and Tokyo.

The 1994 charge, pending in U.S. District Court in Columbus, OH, says a unit of De Beers was part of a global conspiracy with General Electric Co. to fix prices in the industrial diamond market. The government has already lost its case against GE.

The WSJ article, which also chronicled recent developments in De Beers' history, contained several errors, including misspelling the De Beers name "DeBeers" and the Kimberley Process as "Kimberly Process." It referred to De Beers' famous slogan as "Diamond is Forever," instead of the correct version "A Diamond is Forever."

by Peggy Jo Donahue

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