Alexander arrested!, page-5

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KIMBERLEY Diamonds chairman Alexandre Alexander has been granted bail after facing court on four charges relating to misleading statements allegedly made to shareholders between October 2013 and March 2014.

Alexander appeared in Sydney’s Central Local Court by video link this morning charged with the offences under the Corporations Act, having earlier been arrested by Australian Federal Police at Sydney Airport on the back of an Australian Securities & Investment Commission investigation.

Alexander, a former executive chairman and chief executive of Kimberley Diamonds and current non-executive chairman, is said to have authorised the release of misleading statements relating to Kimberley Diamonds’ future earnings forecasts. It is alleged the statements misled shareholders because they failed to disclose the fact that Kimberley assumed it would obtain a 30% increase in the price received for rare yellow diamonds from the Ellendale project in Western Australia in the last quarter of the 2014 financial year.

Kimberley was in negotiations with Tiffany & Co over an increase to the price it would receive under a contract for its Ellendale gems between March 2013 and May 2014, when the talks broke down. The failure to secure a higher price for its diamonds resulted in a reduction of the company’s forecast earnings from $A7.5 million to $1.5 million for the June quarter of 2014. Kimberley shares fell by 41.5% following the announcement.

In July of this year, operations at Ellendale were suspended and subsidiary Kimberley Diamond Company was placed into voluntary administration. KDC has subsequently been liquidated at the recommendation of administrators from Jursch Sutherland.

Alexander was granted bail following today’s hearing subject to strict travel conditions, including the surrender of his passport to ASIC. The matter will return to court on November 10.