South African court agrees to block sale of 27-carat pink diamond

South African businessman has obtained a temporary court order blocking the sale of a 27-carat pink diamond with a claimed value of $25 million found on November 3 in the Northern Cape.

Johann Jacobus Cilliers secured the order in the Cape Town High Court last week to stop Kimberley Consolidated Mining (KCM), in which he owns shares, selling the diamond, found last month at the miners' Bo Karoo site in the Northern Cape, according to a report in Times Live.

Cilliers claims that the company is in financial difficulties, and will receive on just 15 percent of the profit from the sale of the diamond because of an invalid subcontractor agreement with Pico Diamonds.

He wants the company to retain all the proceeds of the sale which would help ensure its survival. Cilliers said the money could be used to pay creditors, reacquire mining equipment and pay dividends to investors.

Cilliers claimed the firm and its subsidiaries were plagued by corruption and "maladministration".

KCM CEO Phemelo Sehunelo told The Times: "One, we are ready to defend the action and, two, we have a good subcontractor agreement with Pico Diamonds. And we have been keeping records of everything. Since the inception of this company or joint venture, this single shareholder [Cilliers] has been causing problems for us."

Last year, the JSE-listed company ran into trouble with the authorities for failing to submit annual financial statements. This month, the company was delisted.

After the cleaning process, the pink diamond will be sold at tender, the firm’s board of directors said. "In terms of the subcontractors agreement, KCM will receive royalty of 15 percent of the gross selling price of the diamond," the board said.

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