DTC to Sightholders: Inform Us About 'Certifigate' Involvement
February 21, 06
In a letter to its clients, Diamond Trading Company (DTC) Managing Director Varda Shine informed Sightholders that they are required to inform the DTC if they are implicated in the GIA ‘Certifigate’ scandal. The letter was issued after the GIA recently notified several more diamond firms that they are no longer allowed to submit diamonds to the GIA for grading.
In the letter (see below), Shine emphasizes that according to the DTC’s Best Practice Principles (BPPs) and following her letter from last November, each Sightholders is required to uphold the “highest professional and ethical standards” and “must demonstrate that it has a good reputation in all its business dealings”.
In the November letter she warned that “the DTC will not hesitate to take action where it transpires that any rumors are substantiated in relation to a DTC Sightholder or any relevant associated business.”
The GIA conducted an internal investigation and turned over to police authorities’ documents and names of businesses and individuals suspected of being involved in scandal. One outcome of this investigation is that the GIA now refuses to grade diamonds submitted by those suspected of involvement in payment for upgraded grading reports.
Below is Shine’s letter to Sightholders:
| Dear Sightholder You will recall that, on the 30th November 2005, Gareth and I wrote to all Sightholders personally in connection with the allegations relating to conduct aimed at influencing the outcome of GIA grading reports. In this letter we sought certain assurances from Sightholders on behalf of their Sightholder groups in respect of any involvement in what has been termed by the industry as “Certifigate”. We now understand that, as a result of the continuing investigation into violations of its Code of Ethics, the GIA has recently written to a number of additional businesses and/or individuals informing them that they are no longer able to submit stones to the GIA for laboratory grading. I feel it important to re-emphasise that we take these matters very seriously and would like to remind you that: By signing the Sightholder Policy Statement, you are contractually bound to comply with The Diamond Trading Company Limited’s Best Practice Principles (“BPPs”). The BPPs emphasise the requirement for the “highest professional and ethical standards”. Criterion 6 of the Sightholder Criteria and other Considerations to the makes it clear that a Sightholder must demonstrate that it has a good reputation in all its business dealings. Rather than repeatedly writing individual letters to Sightholders asking them to confirm their non-involvement or implication in any way whatsoever in ‘Certifigate’ on each occasion a relevant development comes to the DTC’s attention, I would like to emphasise that it is incumbent on Sightholders to pro-actively and immediately inform the DTC (providing a full written explanation) if the assurances you provided to us following our letter of 30th November have changed in any way whatsoever. We would also encourage Brokers to remind their clients of the obligations referred to above. You are kindly requested to address any such correspondence to Desmond Cavanagh – DTC Director of Sales. I am sure you will welcome this move and support the DTC in seeking to maintain the integrity of our industry and consumer confidence in diamonds and diamond jewellery. Yours sincerely, Varda Shine Managing Director |