Office of Fair Trading To Investigate Complaint Against De Beers
The Office of Fair Trading said Tuesday it was investigating a complaint alleging anti-competitive practices by a London-based diamond cartel controlled by South Africa's giant De Beers diamond organization. The watchdog body said De Beers ``appeared to have'' a monopoly on diamond trading in London and it was interested in establishing whether there had been an abuse of the monopoly. Consolidated Gold Fields PLC, a British mining concern with no diamond interests, acknowledged that it filed the complaint as a defensive move against a stalled takeover bid by Luxembourg-based Minorco SA. Minorco is 60.1 percent owned by Anglo American Corp. of South Africa Ltd. and De Beers Consolidated Mines Ltd., the gold and diamond mining interests controlled by the Oppenheimer family of South Africa. The British government is expected to rule in the next few weeks whether to allow Minorco to proceed with its 2.9 billion-pound (about $5.1 billion) bid for Consolidated Gold following an investigation by the Monopolies and Mergers Commission. A Consolidated Gold spokesman, commenting on condition he was not identified, said the company wanted to point up the ``monopolistic tendencies'' of South Africa's Anglo-American group of companies. De Beers' Central Selling Organization, which controls 80 percent of world diamond trading, has been based in London for 60 years. As well as selling the stones mined by De Beers and other South African companies, the organization trades on behalf of diamond producers including Zaire, Australia, Botswana and the Soviet Union. The Office of Fair Trading said it would first have to establish whether it had jurisdiction over the Central Selling Organization because although it is based in London, De Beers is a South African company. There is no time limit on the office's investigation. After it is completed, the Office of Fair Trading may decide to refer the complaint to the Monopolies and Mergers Commission. A spokesman for the Central Selling Organization said the Office of Fair Trading notified the organization about the inquiry but hadn't yet requested any information. ``It's still early'' in the investigation, said the spokesman, commenting on condition he was not identified. De Beers's shares were unchanged Tuesday on the London Stock Exchange at $12 (U.S.).
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