PMMC in Dubious Sale of 'Conflict' Stones?

THE Precious Minerals Marketing Company Limited (PMMC), the only institution established by law to monitor and supervise the purchase and export of diamonds in Ghana, is in the middle of a scandal over suspected 'conflict' diamond deals and dubious sales practices.

Chronicle investigations into the operations of the PMMC, including document examination, multiple interviews and corroborating accounts, indicate that aid-seeking Ghana may have been duped of nearly $2million in foreign exchange through fast fingers transactions at PMMC.

In confrontation with the chief executive of PMMC recently, he challenged Chronicle intelligence assessment over how 88,000 carats of diamonds could be sold for a miniscule $2.30 cents per carat to an Israeli company, when the mandatory column on official paper work appeared to have been compromised.

Reacting to allegations that the diamonds sold at 'ridiculous' price could be from a war-torn zone and therefore constituted 'blood diamonds,' Mr. Peter Boachie, the CEO, debunked such a notion:

"If the source of the diamonds was questionable or blood diamonds as is being alleged it would have been detected on arrival in Israel for them to raise alarm," he said, and went on to explain that diamond prices are determined by its quality and therefore the low price could not be attributed to malfeasance.

PMMC has been in trouble before during the NDC days and ended with the CEO at the time been sent packing.

Interestingly, the PMMC boss could not tell Chronicle the quality of the precious stones that made up the total of 88,127.55 carats sold to DWS Ltd, an Israeli company, at less than US$3 per carat.

The names of some of the small-scale diamond dealers licensed by PMMC and who had been credited on the purchasing vouchers of the PMMC as the source of some 88,127.55 carats of diamonds have turned out to be a hoax.

This is because some of the small-scale diamond dealers who the PMMC vouchers indicated as the sellers say they knew nothing about the said transactions.

Chronicle gathered that the diamonds were sold for over $20.00 per carat and that the parcel in question fetched DWS over $2.3M in Israel. Thus there was a huge discrepancy between the export value of $201,383.30 as quoted by the PMMC valuers, and the actual prices obtained in Israel.

Between November 8 and 18, last year, DWS allegedly purchased 88,127.55 carats of rough industrial diamonds from some local small-scale diamonds dealers at an average price of $2.27 per carat, while the going price around that same period was between $20 to $25.

The government is in dire need of foreign exchange for many infrastructural projects, like roads and schools, the sort of necessities that drove a desperate government to pursue a historic rainbow con job for $1billion that blew in the face of the Minister of Finance and the Governor of Bank of Ghana last year.

This embarrassing national issue spurred Chronicle to dig deeper into the trail of the diamond saga.

It turned out the diamonds were actually valued by the PMMC's chief metallurgist, Mr. J.W Essel, and endorsed by Mr. Boachie.

The endorsement read: "Does not contain any diamonds from the conflict zones." Insiders say the top management of the PMMC, after the deal, pressurized some small-scale dealers to accept the responsibility as those who sold the diamonds. But the miners vehemently refused.

Most of the vouchers of the transaction sighted by the Chronicle appeared to be full of irregularities.

SIGN FOR

For instance, one of the small-scale dealers was made to sign for the director of a different company after signing for his own company, while one of the so-called sellers did not append his signature on the voucher to claim his money.

Commenting on the issue, the DWS local representative, Mr. Benny Ashun, told Chronicle that he believes DWS did not buy any suspicious diamonds. Though Benny Ashun professes to be clean - he is actually a front pew member of a popular church- his company's role in this transaction has raised suspicion by Chronicle's head office recce team. He questioned the quality of the gemstones.

But his intervention was denounced by Chronicle's Israeli sources, who said over 80 per cent of the diamonds can be described as high quality. The source gave the breakdown of the shipment as follows: Dust (-5) 14.50 per cent, Sand (+5-8) 36.00 percent, Melees (+8-15) 42.00 percent and Sizes (Sizes) 07.50 percent.

With those specifications insiders of the diamonds trade dismissed Ashun and Boachie's defense, arguing that if the diamonds were not acquired from a questionable source such ridiculous price would not have been quoted since the lowest quality diamonds, BOART, would not even be sold at $3.00 per carat.

Knowledgeable sources are of the opinion that at such low prices, the possibility of under-invoicing and its money laundering implications cannot be ruled out.

Also of significance are the implications for Ghana, being a signatory to the International Treaty on Conflict Diamonds, otherwise known as the Kimberlite Process.

Signatories to this treaty have agreed to clamp down on diamonds from war torn areas, since it is believed that proceeds from such diamond sales fuel the war chest of rebels.

On November 14, last year, the first shipment of 71,852.90 carats left Ghana for Israel. Eight days later, being November 18, another parcel containing 16,274.65 carats was also shipped to Israel. Records at the PMMC indicated that the quantum of diamonds represented the highest ever exported by any single company in one month for the year 2002.

As at the time of going to press our information had it that one of the Israeli directors of the DWS, Mr. Oded D. Desau, hads resigned from the company. Is his resignation in protestation over questionable diamonds purchase which had bedevilled the DWS Ltd ?

Chronicle investigations continue.

Also under investigation, Mr. Kofi Asante, former Databank employee (a.k.a Nana Bediatuo) Faith Brothers, Mawuli Ababio and the Kwame Addo's NIB saga. What happened? How did it end?

Stay tuned.