The Diamond Board has added damning new charges to its case against its CEO Victor Sibiya, whom it accuses of failing to disclose business ties with a director of a company that won a major government diamond-related contract.
The state’s diamond regulator’s new charges against Sibiya were handed to his lawyers last month and the Mail & Guardian obtained a copy of the charge sheet this week.
Sibiya is set to appear before a Diamond Board disciplinary inquiry this Friday.
Kanyo Gqulu, spokesperson for the Department of Minerals and Energy, said this week that his department would be monitoring the disciplinary hearing with keen interest to ensure ”a fair and swift outcome”. The department is responsible for the Diamond Board.
Sibiya is a former adviser to Minister of Minerals and Energy Phumzile Mlambo-Ngcuka. She suspended him in May on charges that he did not do his work properly.
The first charge sheet did not contain charges of impropriety, but allegations of insubordination and claims that Sibiya antagonised people in the diamond industry. Other charges included allegations that Sibiya abdicated his responsibilities and duties by recusing himself from ”any matter dealing with investigating or determining whether the government diamond valuator [DVIC] has or has not performed as contemplated in their contract with the board”.
The new charge sheet mainly relates to Sibiya’s business dealings with Brian Frank, director of DVIC, the consortium that won a four-year multimillion-rand government contract in 1998 to determine the value of the $1-billion rough diamonds that South Africa produces each year.
The board charges that Sibiya failed to disclose to Mlambo-Ngcuka and the 19-member board that he resides in a lavish house in Sandown, north of Johannesburg.
Until Sibiya acquired it, DVIC’s Frank owned the house through a close corporation, Shelftan Twenty Two, which he bought in 1997.
The board charges that Sibiya failed to disclose to Mlambo-Ngcuka and the board that he acquired Shelftan Twenty Two in March this year, when he was engaged in negotiations with DVIC.
The Diamond Board charges that Sibiya furnished ”false” information about the Shelftan transaction. It says Sibiya claimed that he acquired Shelftan in 1999, though records from the Deeds Office show that he acquired Shelftan from Frank in March this year.
Sibiya is also charged with failing to comply with an urgent notice in May requiring all board members to supply the board with ”a fully completed and signed declaration of personal and private business interests as required in terms of Section 26-29 of the Corporate Governance Manual”.
Approached for comment this week, Sibiya referred queries to his legal representative, Hanro Friedrich attorneys. Hanro Friedrich said Sibiya had done nothing wrong and that there was sufficient proof to back his defence. They refused to divulge the details of their defence, saying they did not want to prejudice their case.
Frank also came to Sibiya’s defence. He said he has since quit DVIC, but that there was nothing ”untoward” about his relationship with Sibiya. He said there was a mix-up and administrative oversight during the Shelftan transaction.
Frank said Sibiya acquired Shelf-tan in 1999 but the property was only formally registered in his name this year. Frank dismissed suggestions that his relationship with Sibiya could be construed as a conflict of interest on Sibiya’s part.
He said Sibiya paid for the property and that he had merely helped the official to secure a home loan from the bank.
The Diamond Board is a statutory body that, among other things, regulates the diamond industry and ensures that the correct taxes are paid on exported diamonds. DVIC reports to the Diamond Board.
DVIC is headed by Hlengiwe Mkhize, the former head of the Truth and Reconciliation Commission’s reparations committee.
At the time DVIC won the diamond valuation contract rival bidders expressed misgivings about the tender process, claiming that DVIC was selected long before the process was completed.
DVIC’s contract expires at the end of this year and the Diamond Board will initiate a procurement process to appoint a new diamond valuator. It is not clear if DVIC will be retained.
DVIC’s tenure as the government diamond valuator has not been smooth. In the past few months it has clashed with the Diamond Board over payment for its services. Last year the assets and accounts of the Diamond Board were frozen after the board violated a court order obliging it to pay DVIC.
At the time Frank said the board owed his company R300 000 — one part of a settlement of about R3,7-million, which was to be paid back in instalments.