Over the past couple of months, W.B. David has become one of the water-cooler conversations throughout the diamond industry. In an exclusive interview with IDEX, Walter David explains why he feels his company was faced with no choice but to file suit against the De Beers group of Companies, Company Directors, DTC Sightholders, U.S advertising agency J. Walter Thompson, and others for some $100 million.

 

The following excerpts appear in the exclusive interview between W.B. David and IDEX Magazine’s Virginia Halevi to be published in the September issue of the Magazine:

 

“On the wall facing his desk hung a framed invitation and commemorative plaque. The invitation requested the pleasure of Mr and Mrs W. David on the occasion of De Beers Consolidated Mine’s Centenary Dinner being held in London back in 1988. This framed memento has obviously, for many years, held pride of place in this 47th Street office. One cannot fail to notice it and certainly for Walter David, he probably looks at it without seeing it a hundred times a day. I wonder if he even realises it’s still there and if he does, what a different significance it must hold for him today than it did 16 years ago. No longer is his company one of the chosen De Beers’ Sightholders. Certainly there will be no more engraved invitations from De Beers for this ex-Sightholder. Probably the only correspondence taking place today between this 47th Street diamond house and De Beers is through lawyers and court officials.

 

“On July 1st this year, W.B. David filed suit in federal court in Manhattan against the De Beers group of Companies, Company Directors, DTC Sightholders, U.S. advertising agency J. Walter Thompson, and others for some $100 million, injunctive relief and attachment of De Beers’ U.S. assets.  

 

“De Beers claimed that we were out-marketed by many other Sightholders,” stated Walter David. This was one of the main reasons apparently why the New York diamond house was dropped from the exclusive Sightholder list. “I find that hard to believe,” David continued. “I mean we had previously been given the largest share of the De Beers’ Millennium Diamonds to market just a few years earlier, due to the significance of our market share.”

 

“According to the company chairman, another reason given as to why W.B. David was dropped, was that the company was too ‘generic’ focused. “What a contradiction that was,” he refuted, “we had been receiving specific allocations from De Beers for the Leading Jewelers campaign and then they turn around and say we’re generic focused”.

 

 “Other defendants in the suit include all current DTC Sightholders, and U.S advertising agency J. Walter Thompson. So why did W.B. David include Sightholders in their suit against De Beers? “As our complaint states, Sightholders are co-conspirators as to what has happened concerning the corruption as Supplier of Choice was formally implemented.” Continuing, David reasons, “due to Supplier of Choice the diamond market has become more supply driven than demand driven, and the only change in the market dynamics has been the introduction of SoC – therefore anyone connected with the program is to blame, in collusion with De Beers.”

 

“As for J. Walter Thompson, the company, the suit claims is De Beers’ ‘U.S. agent and alter ego through which De Beers illegally conducts business in the U.S.’ One of David’s main gripes with this advertising giant dates back to their work on Leading Jewelers of the World. “W.B. David paid JWT to conduct a survey to find out more about consumer reaction and perception to Leading Jewelers.

 

“After completing the survey named Project Phoenix, JWT then turned round to us and stated that they could not work on Leading Jewelers as they felt we ‘didn’t at this stage have the proper infrastructure in place’. No mention,” David stresses “was made regarding a conflict of interest with their work with De Beers. We had divulged to them every last detail of the Leading Jewelers program and neither they nor De Beers at the time mentioned once that they were planning to do the same program [Diamond Masters of Japan]”.

 

 “They’ve hurt my business terribly,” he muses. “It’s now for a court of law to decide if the claims put forward are valid. The lawsuit is based on purely commercial issues.”

 

As for legal strategy and the company’s ultimate aim, “we seek redress for the wrong perpetrated against us by resort to the court”.

 

In response De Beers said: We understand that a complaint has been filed by WB David in the federal court in the Southern District of New York. WB David is a disgruntled former Sightholder who did not qualify under Supplier of Choice in July 2003. We are aware of his allegations from previous discussions with him and we believe these allegations to be entirely without merit. As you know, it is our policy not to comment on matters subjudice to any third parties.

 

It would therefore not be appropriate for us to effectively undermine this position by commenting on the accuracy or inaccuracy of any of the content in the article. 

 

We see this as a private matter between the parties named in the action and it is to them, and them alone, that we will address the answers to any queries regarding our position in this matter.

 

The full article will be appearing in IDEX Magazine’s September issue.