As a result of an ASIC investigation, the former chief executive and executive chairman of Kimberley Diamonds Limited today was charged with offences under the Corporations Act for allegedly issuing false information to the market.

Appearing in Sydney’s Central Local Court via video link, Alexandre Alexander was charged with four offences relating to false and misleading statements made by Kimberley Diamonds to the Australian Securities Exchange (ASX) between October 2013 and March 2014.

It is alleged the statements, which related to the company’s future earnings forecasts, and which were authorised by Mr Alexander, were false and misleading because they failed to disclose the fact that they assumed that they would obtain a 30% increase in the price that Kimberley Diamonds would receive in the last quarter of the 2014 financial year, for its rare yellow diamonds.

Mr Alexander’s court appearance follows his arrest by officers from the Australian Federal Police (AFP) at Sydney airport early this morning. Mr Alexander was returning from overseas.

Mr Alexander applied for and was granted bail subject to strict travel restrictions, including a condition he surrender his passport to ASIC.

The matter was adjourned and will return to Sydney’s Downing Centre Local Court on 10 November 2015.

The Commonwealth Director of Public Prosecutions is prosecuting this matter.

Background

Each charge carries a maximum penalty of five years jail and/or a $34,000 fine.

ASX-listed Kimberley Diamonds is an Australian-based diamond exploration and mining company with assets in Australia, Botswana and Spain. Its main diamond producing mine located in Ellendale, in Western Australia, was the world’s leading source of rare yellow diamonds. The diamonds mined at Ellendale were sold by Kimberley Diamonds to Laurelton Diamonds Inc, a subsidiary of Tiffany & Co.

Between March 2013 and May 2014 Kimberley Diamonds was in negotiations with Tiffany & Co that were aimed at increasing the price that Kimberley Diamonds would be paid for its diamonds.

On 12 May 2014, Kimberley Diamonds announced to the market that price increase negotiations with Tiffany & Co had failed and, consequently, the company’s earnings forecast for the last quarter of the 2014 financial year was revised down from $7.5 million to $1.5 million. The price of Kimberley Diamonds’ shares fell by 41.5% following the announcement.

On 1 July 2015 Kimberley Diamonds announced that Kimberley Diamonds Company Pty Ltd, a wholly owned subsidiary of Kimberley Diamonds, and the owners of the diamond mine at Ellendale, had been placed into voluntary administration.

Editor's note 1:

On 10 November 2014, the matter was mentioned in the Downing Centre Local Court where it was stood over to 15 December 2015.

Editor's note 2:

On 15 December 2015, the matter was stood over to 12 January 2016.

Editor's note 3:

On 12 January 2015, the matter was adjourned to 2 February 2016.

Editor's note 4:

On 2 February 2016, the matter was adjourned to 29 March 2016.

Editor's note 5:

On 29 March 2016, the matter was adjourned to 20 June 2016 for a committal hearing. The court fixed for hearing on 16 May 2016, Mr Alexander's application under section 91 of the Criminal Procedure Act 1986 (NSW) for a direction that three witnesses who have made statements that the prosecution intends to tender as evidence in committal proceedings attend and give evidence at the committal hearing. 

Editor's note 6:

On 24 June 2016, after a committal hearing lasting two days, Mr Alexander was committed for trial and is to appear at the Sydney District Court on 1 July 2016 for arraignment.

Editor's note 7:

On 1 July 2016, the matter was set down for trial at Sydney District Court on 13 March 2017, with 3 weeks reserved. In addition, the Crown was granted an extension to 29 July 2016 to file the Indictment, and Mr Alexander's bail was continued on the same terms.

Editor's note 8:

On 19 April 2017, after deliberating over seven days and being unable to reach unanimous verdicts, the jury was discharged and the matter was stood over to 26 May 2017, at Sydney District Court, to fix a new trial date. Mr Alexander's bail was varied by deleting travel restrictions, including the condition that he surrender his passport, and adding a condition that ASIC be given 48 hours' notice of any intended overseas travel. 

Editor's note 9:

On 26 May 2017, the matter was set down for re-trial at Sydney District Court on 7 May 2018, with four weeks reserved, and Mr Alexander's bail was continued on the same terms.