Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 18, 1994 TAG: 9402180150
SECTION: BUSINESS PAGE: A7 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The Justice Department said the two firms have 80 percent of the market in man-made industrial diamonds, which are used in saws to cut stone and concrete, in bits for oil-drilling and in machine tools.
The one-count indictment, returned in U.S. District Court in Columbus, Ohio, charged that the price-fixing scheme was carried out by GE manager Peter Frenz and De Beers associate Philippe Liotier beginning in 1991. It said the higher prices went into effect worldwide in February and March 1992.
The government said the pair and unnamed co-conspirators agreed to swap pricing plans before showing them to their own distributors and customers.
If convicted under the Sherman Act, the corporations could be fined up to $10 million, or twice their gain or their victims' loss, whichever is greater. The individuals face a maximum of 3 years in prison and a fine of $350,000, or twice the gain or loss, whichever is greater.
Frenz is a German citizen and managing director of the European operations of GE's industrial diamond business. Liotier is a French citizen and former director of Sibeka, a Belgian company with a 50-50 joint venture with De Beers to manufacture industrial diamonds in South Africa, Ireland and Sweden. He also was chief executive until Jan. 1, 1992, of Diamont Boart, a Belgian tool manufacturer that bought industrial diamonds from GE and De Beers.
De Beers has corporate ownership links with De Beers Consolidated Mines Ltd., a South African corporation known for its control of the natural diamond industry.
The indictment came a day after a fired General Electric executive who had accused the company of conspiring to fix worldwide prices for industrial diamonds dropped a lawsuit and retracted his allegations.
In a sworn statement filed with the court, Edward J. Russell retracted all his charges and said he now understood GE fired him because it was displeased with his performance, not because he was a whistleblower.
Russell, 56, sued in April 1992 and alleged GE fired him in November 1991 as vice president of the Superabrasives Division because he had blown the whistle on what he said were price-fixing activities involving collaboration with De Beers.
Russell's lawyer, James Helmer Jr., declined to say why Russell dropped the lawsuit.
by CNB