DTC Sightholder Festdiam in Provisional Liquidation (Updated)

Festdiam Cutting Works (Pty) Ltd. is in provisional liquidation, sources in South Africa have confirmed. The Diamond Trading Company (DTC) Sightholder was recently mentioned in connection with a swindle, where it claims to have lost $35 million.

According to a banking source, Nedbank is conducting an investigation of the case, performing a forensic audit.

Festdiam allegedly fell victim to a $35 million swindle. The company filed a complaint with the Israeli police alleging that the owners of International received and sold $100 million worth of memo goods, but did not forward all of the money to Festdiam.

The case raised a number of eyebrows in the Ramat Gan diamond exchange, with traders wondering how a company provided such a large credit to a company that was not a member of any diamond bourse and did not provide any securities as a guarantee.

According to a police spokesperson, after repeated requests to be paid, Peyker handed to one of the two Meents brothers that manage the family owned firm a number of sealed boxes that were supposed to hold diamonds. These boxes turned out to be either empty or contain diamonds of very low value.

Festdiam principal Lester Meents, who is based in South Africa, passed the following comment to IDEX Online: "We are currently investigating the nature of the Peykar relationship."

According to a receptionist at its New York office, Jeffery Meents - Lester Meents' brother - does not come into the office anymore. Neither does his son Doran who is listed as the sales contact at the New York office.