The former head of Australian mining company Kimberley Diamonds has been acquitted of charges that he signed off on market statements that assumed luxury retailer Tiffany & Co would pay higher prices for the company’s rare yellow diamonds.
Following a jury trial in the District Court of New South Wales, former Kimberley head Alexandre Alexander was acquitted of two charges of making misleading market statements on Monday. The next day, the jury said it had failed to reach a unanimous decision on two other charges of misleading the market.
A hearing has been scheduled for July 13 to determine whether a further trial will be conducted on the two charges the jury could not reach a decision on.
Alexander was charged in 2015 following an investigation by the Australian Securities and Investments Commission. The corporate regulator claimed Alexander violated the Corporations Act by signing off on allegedly misleading company statements between October 2013 and October 2014.
ASIC alleged the statements failed to disclose Kimberley assumed it would obtain a 30 per cent price increase for its yellow diamonds.
Between March 2013 and May 2014, Kimberley was in negotiations with luxury retailer Tiffany & Co. aimed at increasing the price Tiffany would pay for the diamonds sourced from Kimberley’s Ellendale mine in Western Australia, the world’s leading source of rare yellow diamonds.
Kimberley announced on May 12, 2o14 that its negotiations with Tiffany & Co had failed and revised its earnings forecast for the last quarter of 2014 fiscal year down to $1.5 million from $7.5 million.
The announcement led to a 41.5 percent drop in the company’s stock price.
On July 1, 2015 Kimberley announced the subsidiary that owned the mine at Ellendale had been placed into voluntary administration.
Alexander and former company directors Noel Halgreen and Rod Sainty also faced a lawsuit filed in the Supreme Court of New South Wales by the liquidators on Ellendale alleging they knew the Kimberley unit was insolvent for at least five months before it was placed into administration.
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