Determining who the actual owner of Life Diamonds Cutting Works is will stay on hold until early October while the National Prosecuting Authority (NPA) studies representations submitted by the defendants, Erez Daleyot and Ptachya Chelchinsky.
Daleyot, Chelchinsky and a third accused who is in Israel, Menahem Gurman, face fraud and theft charges over the ownership of Life Diamonds.
According to the request from South Africa to Israel for Gurman’s extradition by the Special Director of Public Prosecutions, Advocate Lebohang Moloi, there were four shareholders in Life Diamonds, namely A Arabov Investments Limited (40%), DD Manufacturing NV (40%), Jomo Sono Life Diamonds (Jomo Sono)(15%), and KT Collection BVBA (KT Collections)(5%).
> > ALSO READ: The hotel bill, the diamond rascal and Jomo Sono
According to the NPA, Arabov proposed to sell its entire shareholding in Life Diamonds to Mackie Diamonds, represented by Ali Mackie, and Life Diamonds, represented by Erez Daleyot, who then entered into a written agreement for which about R7 million was paid to Arabov for the shares by Mackie.
“The sale agreement was prepared and drafted by Menahem Gurman,” said Moloi.
Jomo, the black partner
Mollie noted that, afterwards, Mackie Diamonds and DD Manufacturing each transferred 3% of their shareholding to Jomo Sono in order to comply with the Black Economic Empowerment Charter.
“KT Collection transferred their entire shareholding to Jomo Sono. The Jono Sono shareholding was subsequently transferred to Crystal Clear Diamonds,” Moloi wrote.
Here’s where it gets tricky.
“Shortly after the Sale Agreement, Gurman, acting in concert with Daleyot and Chelchinsky and in furtherance of a common purpose, approached the auditors of Life Diamonds, namely Milton Lutrin & Associates (Milton), and falsely and fraudulently represented to Milton that he (Gurman) was authorised/permitted to restructure the shareholding of Life Diamonds,” claimed Moloi.
Moloi alleged Gurman instructed Milton to amend the shareholding of Life Diamonds as follows:
- The DD Manufacturing shareholding in Life Diamonds were to be transferred to Simperia Holdings Ltd (“Simperia”); and
- Menahem Gurman falsely alleged that the Mackie Diamonds shareholding in Life Diamonds were transferred to DD Manufacturing on March 15, 2013, and thereafter again transferred to Simperia.
Thus according to the false instructions of Menahem Gurman, the shareholding of Life Diamonds were that Simperia held 74% and Jomo Sono (later Crystal Clear Diamonds) 26%.
> > ALSO READ: R1.5m Saxon hotel bill fraud case continues
“Consequent to the above, Menahem Gurman, Erez Daleyot and Ptachya Chelchinsky, acting in concert and in furtherance of a common purpose, falsely and fraudulently orchestrated the restructuring of Life Diamonds’ management by appointing new directors, removing previous directors, appointing a new public officer, company secretary and auditors of the company and further asserting that Simperia was a registered shareholder of Life Diamonds (and as majority shareholder) entitled to take decisions to replace directors of Life Diamonds,” Moloi accused.
Not so fast, Chelchinsky countered in his representation to the Specialised Commercial Crimes Court on Life Diamond stationery noting Chelchinsky as sole director of the company.
A bit of a conspiracy
In a complaint addressed to Advocate Nomcgobo Jiba, a deputy director of public prosecutions at the NPA, Chelchinsky and Daleyot – “an experienced international diamantaire of 30 years’ standing, and long-time advisor to Life [Diamonds]” – claim “very serious charges to the value of ZAR1 billion to date have been systematically and improperly quashed, frustrated and/or stalled by prosecutor advocate TR Chabalala in the Commercial Crimes Court in Johannesburg, with the unlawful cooperation and/or collaboration of a civilian third party, former prosecutor and now attorney, one Nardus Grove, here in South Africa, in Belgium, and in Israel.”
Chelchinsky accuses Chabalala of holding a slew of dockets and not investigating or prosecuting them, and not permitting arrests or subpoenas.
“Grove engineered the cancellation of a subpoena requested by Detective Akoo against Lutrin and Associates in the CIPC (Companies and Intellectual Property Commission) case in the lower courts by obtaining the cooperation of a court official to withdraw his request for the subpoena extrajudicially and, it is submitted, unlawfully,” said Chelchinsky, and added the matter was under investigation by the chief prosecutor in Johannesburg.
Chelchinsky goes on to assert Sono’s company Crystal Clear Diamonds was never a lawful shareholder of Life, and neither was Mackie.
“Sometime between July and September 2015 Lutrin took the law into his own hands and unlawfully transferred the shares of Simperia to Mackie Diamonds in response to threats of criminal action by Mackie more than two years after Simperia Holdings first became a shareholder in Life with Lutrin’s full knowledge, assistance, and consent…” Chelchinsky wrote.
“Life and the Jeppe SAPS have effectively been precluded from pursuing redress through the civil and criminal courts for patently criminal activities perpetrated by some or all of the above-named parties,” said Chelchinsky.
Any fraud you can think of
He listed examples of complaints such as Life Diamonds’ hijacking, fraud against its creditors, fraud against the Diamond Regulator in SA and Israel, SARS fraud, CIPC fraud, illegal diamond dealing and theft and “wholesale looting and destruction of company assets, including the shredding of physical and deletion of electronic books and records” as examples, among others.
“We appeal to you for your urgent assistance in this matter and request the immediate transfer to Pretoria of all the cases listed [in this representation],” Chelchinsky asked Jiba, adding he feared the failure of Life Diamond as a business, and that justice would not be done.
Papers submitted by Chelchinsky also note Sono’s company was deregistered in 2010 for failing to submit its annual returns, according to CIPC, and that any deals concluded with Life Diamond were unlawful.
The matter will come before the Specialised Commercial Crime Court in Johannesburg again in October.