De Beers, the world’s largest diamond company, indicated it will plead guilty on July 13 to a U.S. charge that it fixed prices of industrial diamonds, ending a 10- year legal battle, a court clerk said.
“The court is set to take down De Beers’s guilty plea,” Keith Mayton, a clerk for U.S. District Judge George C. Smith in Columbus, Ohio, said in a telephone interview. The maximum penalty is a $10 million fine, he said.
The plea may pave the way for Johannesburg-based De Beers to expand in the U.S., where half of all diamond jewelry is sold. The company already is moving beyond the $8 billion-a-year rough- diamond industry into the $60 billion diamond retail market through a venture with LVMH Moet Hennessy Louis Vuitton SA.
Andrew Bone, a spokesman for De Beers in London, declined to comment on the company’s plea. Gina Talamona, a U.S. Justice Department spokeswoman in Washington, D.C., didn’t immediately return a telephone message seeking comment.
De Beers previously had failed to appear in court to face the charge, filed in 1994, that it conspired to violate antitrust laws in 1991 and 1992. General Electric Co., the world’s largest company by market value, was accused with De Beers. The case against the Fairfield, Connecticut-based company was thrown out because of a lack of evidence, Mayton said.
De Beers had operated in the U.S., the world’s biggest economy, through intermediaries since shortly after the end of World War II, in part because of a previous antitrust lawsuit brought by Attorney General Francis Biddle.
“It is highly desirable that we are not a pariah in the U.S.,” Gary Ralfe, De Beers’s managing director, said in March.
Between 1929, when Ernest Oppenheimer took over as chairman, and 2000 De Beers bought the output of rivals to control diamond prices, at times selling four of every five unpolished stones.
Pleading guilty to the U.S. charge may attract more lawsuits, said Chaim Evan-Zohar, the principal shareholder in Ramat Gan, Israel-based consultant Tacy Ltd. W.B. David & Co., a jeweler and former De Beers client, last week sued the company in New York, demanding at least $100 million in damages and alleging it behaved like a monopoly.
“Entering such a plea will be a monumental mistake,” Evan- Zohar said. “Any admission will be used quickly and immediately by many other class-action lawyers.”
De Beers, which sells its stones to a select group of clients known as sightholders, has said W.B. David’s suit is without merit.