De Beers to Appear in U.S. Court

June 24, 2004

De Beers to Appear in U.S. Court

De Beers will go to court in the U.S. next month to clear a decade-old antitrust case, says Bloomberg News. The antitrust indictments concern industrial diamonds. De Beers and General Electric faced criminal charges for conspiring to fix prices. The case against General Electric was eventually dropped, but remained open on De Beers, which did not have a U.S. presence. The company will appear in an Ohio court July 13. Winning or settling the case would pave the way for De Beers to return to its most important market. Some analysts quoted in press reports say De Beers may agree to plead guilty and pay a fine to settle the legal disputes.

Along with allowing De Beers executives to visit the U.S. without the threat of arrest, resolving its legal issues would make it possible to set up operations in the U.S., where it currently trades via intermediaries. It would also smooth the way for De Beers' joint venture with LVMH Moet Hennessy Louis Vuitton, which plans to open retail jewelry stores under the De Beers name in several U.S. cities.

Gary Ralfe, managing director of De Beers, said last year he was optimistic De Beers' success in convincing European antitrust authorities it was not a monopoly could be replicated in the U.S., where that perception is also a barrier to doing business. De Beers, which is 45% owned by Anglo American and 45% held by the Oppenheimer family, has seen its diamond market share go from 80% to about 60% in recent years. Analysts say De Beers' deep involvement in the Kimberley Process, a worldwide initiative to curb trade in conflict diamonds, has also been a bargaining chip with the U.S. government.

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