1989 – 2010

In 1992, the Alexander Bay Development Corporation was transformed into a company named Alexkor under the Alexkor Limited Act and registered under the Companies Act. The rights to the land previously held by the state were transferred to Alexkor. The government is the sole shareholder of Alexkor through the Minister of Public Enterprises.

Effective 20 April 1995, all land title deeds received an endorsement attesting to the issuance of a mineral rights certificate in favour of Alexkor for all mineral rights on or beneath the land.

From 2000 until 2006, all of Alexkor’s diamond sales were conducted via De Beers’ company Diamdel. The De Beers Group is a diamond company specialising in diamond exploration, mining, grading, marketing and retail. Diamdel’s contract was terminated in 2006 due to its diamond prices being deemed unsatisfactory.

In 2003, the Richtersveld community brought a successful land claim in terms of Section 2(1)(d) of the Restitution of Land Rights Act 22 of 1994 as ruled on by the Constitutional Court of South Africa. A settlement agreement was reached between the Richtersveld community, Alexkor and the South African government on 22 April 2007. Under the terms of the settlement, the South African government transferred 194 600 hectares of land to the Richtersveld community. This included a coastal strip of 84 000 hectares of diamond-bearing land that was mined by Alexkor. This settlement paved the way for Alexkor and the Richtersveld community to create a joint venture to carry out diamond mining and marketing operations. The settlement also established a less complex management structure.

2011

Alexkor and the PSJV did not conduct any marine mining – it was outsourced to private contractors, particularly marine divers who used small boats to dredge the seabed. The contractors sold the gravel to plants, which processed it to obtain diamonds. The diamonds were then sold by the PSJV with the help of an agent who marketed and sold the diamonds. Diamond Marketing Consultants (DMC) was the PSJV’s appointed agent. Alexkor’s diamonds were marketed and sold by DMC until 2014.

Figure 1: Approved mining, gas and oil operations on the West Coast, including the PSJV’s mining locations as at 2022.

2012

In September, Malusi Gigaba, Minister of Public Enterprises, appointed Rafique Bagus as the chairperson of the Alexkor board. Bagus was a known Gupta associate who had regular contact with the Guptas and their network (including Ajay and Rajesh Gupta, Iqbal Sharma and Ashu Chawla) between 2008 and 2016.

2013

On 1 October, Zarina Kellerman was appointed Chief Legal Officer at Alexkor.

On 21 October, the PSJV technical committee raised a concern with PSJV management about how DMC was marketing its diamonds and the prices they were obtaining. On 23 October, the PSJV management obtained approval from the PSJV joint board to appoint a new, temporary service provider.

2014

The PSJV joint board gave approval to the management team to begin a tender process for the permanent appointment of a service provider to replace DMC.

On 31 October, the PSJV extended a request for proposals (RFP) to qualified parties, inviting them to submit ‘innovative proposals for enhancing the mine’s revenue through marketing, post-extraction treatment, processing, and beneficiation of diamonds extracted in Richtersveld’. Bidders were required to submit an expression of interest by 7 November, attend a compulsory briefing on 10 November and submit a formal written proposal by 24 November.

Scarlet Sky Investments 60 (SSI) was one of nine companies that submitted a written expression of interest. Their submission was dated 6 November 2014 and identified the company’s directors as Daniel Nathan and Kuben Moodley, a Gupta associate. However, on this date, the sole director of the company was Hazel Ammann – Nathan and Moodley only became directors in December 2014. Moodley owned a 60% stake in SSI through his company Kimomode, while Nathan’s company, Daniel Nathan Trading, owned the other 40%.

Nathan’s father, Selwyn Nathan, was honorary chairman of Integrated Capital Management (ICM) until he resigned on 2 November 2015. Mark Chipkin, Mark Angel and Stanley Shane were directors at ICM. In December 2017, Selwyn Nathan was a beneficial owner and held 21.97% of ICM. Selwyn Nathan arranged a R50m Letter of Comfort for SSI to submit with its bid. According to testimony at the Zondo Commission, ICM was closely connected to Gupta associate Salim Essa and the establishment of Trillian (which was instrumental in state capture at Eskom and Transnet). ICM is alleged to have had a business relationship with Trillian, and both companies allegedly assisted with preparing SSI’s bids to Alexkor. Nathan has denied having any links to the Guptas and their associates, or that ICM was involved in preparing SSI’s second bid to Alexkor.

PSJV CEO Carstens outsourced the shortlisting of tender bids to a company called Gamiro Advisory Services, controlled by Heather Sonn. Gamiro shortlisted three companies: SSI, CS Diamonds and Fusion. Fusion, the incumbent service provider, scored the highest. SSI came in second despite the fact that Gamiro awarded it zero points for the licence requirement. Although Daniel Nathan Trading had a diamond licence, this could not legally be utilised by SSI.

On 11 December, the final selection for bids was conducted at Alexkor’s Johannesburg office by a tender committee comprising Bagus, Duncan Korabie and Dr Roger Paul. All three awarded SSI the full five points for possessing diamond licences and ultimately gave SSI the highest score, with Korabie scoring SSI 100 points.

Moodley resigned as a director of SSI in November 2015 but retained his shareholding through Kimomode until April 2017. Moodley went to work as an advisor for the Minister of Mineral Resources, Mosebenzi Zwane. Zwane was implicated in the Vrede Dairy Farm state capture project as the Free State MEC of Agriculture at the time.

2015

The Zondo Commission also reported that at the time that the PSJV concluded the contract with SSI, its board was, in all probability, improperly constituted. On 4 September 2014, just before the publication of the RFP, the Western Cape High Court declared that John Bristow, Korabie, Willem Vries and Dennis Farmer had been unlawfully appointed as directors of the RMC. The court reinstated Craig Matthews as the sole director of the RMC. Matthews wrote to Alexkor and the PSJV informing them that Bristow, Korabie, Vries and Farmer were no longer directors of the RMC and could not serve as representatives of the RMC on the PSJV. As a result, any decisions taken by the PSJV board since November 2013 were invalid because the RMC representatives were not appointed by the RMC and had no authority to make decisions on behalf of the company and the PSJV Board. Bagus and Kellerman incorrectly claimed that as neither Alexkor nor the PSJV were party to the litigation, the court order was of no consequence to them. An appeal was lodged against the order – however, the appeal was never prosecuted and lapsed in early 2015.

SSI used the licence of Daniel Nathan Trading to trade the PSJV diamonds from the inception of the contract.

Carstens’ cell phone records reflect that he had frequent contact with Gupta associates Roy Moodley and Stanley Shane between 2015 and 2017.

The new Minister of Public Enterprises, Lynne Brown, appointed a new board for Alexkor, which included Hantsi Matseke as the chair and Trevern Haasbroek.

Matseke was also chair of the board of the Free State Development Corporation (FDC) at the time. During her tenure as chair of the FDC board, it was involved in a number of irregular actions: the FDC irregularly offered a loan to SAA under vague terms against their legal mandate, which was irregularly supported by the SAA Board chaired by Dudu Myeni, and had to be blocked by the National Treasury; the FDC took over the operations of the failed Vrede Dairy Farm project in August 2014, despite having no expertise in dairy farming, and continued to make large payments to Estina into 2016; and the FDC board approved an investment of R100m in VBS Mutual Bank in violation of Public Finance Management Act regulations.

A month before he was appointed to the board, Haasbroek’s CV had been emailed by Brown’s personal assistant to infoportal1@zoho.com with a note saying, “Herewith CV for Alexkor board as discussed”. This email address appeared frequently in other state capture cases (as revealed when a number of emails from the Guptas and their associates were leaked to the public) and allegedly belonged to Salim Essa.

2016

The Zondo Commission reported that the ARC conducted an incomplete and unsatisfactory investigation and did not meaningfully deal with the various allegations against SSI, i.e., that it was a shelf company specifically created for the tender with no track record in the diamond industry; that it did not extract the diamonds for the benefit of the community; and that it did not comply with BBBEE legislation.

Shortly after the ARC report was finalised, and following a tender process conducted from March to June, the SSI tender was extended for five years. This caused significant tension between Alexkor and some of the marine diving contractors, who claimed that SSI was not up to the task of valuing, marketing and selling the PSJV’s diamonds. They alleged that the diamonds were being undervalued and the miners short-changed.

In April, Kellerman was also appointed as an advisor to Zwane, having resigned as Chief Legal Officer of Alexkor in 2015. She remained Zwane’s advisor until March 2018 and acted as the Minister’s secretary during the Inter-Ministerial Committee Inquiry into the closure of Gupta bank accounts by various commercial banks. Kellerman has confirmed that she took up the position at the suggestion of Moodley.

2018

It has been reported that Nathan informed the diamond regulator in January 2019 that Daniel Nathan Trading was changing its name to ABDC and asked for the name of the diamond licence holder to be changed. The regulator approved the licence under the new name, backdating it to March 2015. But Daniel Nathan Trading had not changed its name – instead, Nathan had requested a separate agency to change SSI’s name to ABDC. This meant that the licence intended for Daniel Nathan Trading actually went to the now-renamed SSI.

The Department of Public Enterprises (DPE) commissioned Fundudzi Forensics, a company offering services ranging from fraud and theft investigations to anti-fraud strategies, to perform an investigation into the various allegations levelled against Alexkor and the PSJV. Fundudzi did not testify before the Zondo Commission and the results of this investigation are unknown.

2019

The evidence collected by Gobodo, as well as Jakob Dekker and Peter Bishop (appointed to investigate Alexkor by the Zondo Commission), revealed that SSI had links to the Guptas through, amongst others, its majority shareholder, Moodley. Gobodo’s investigation also concluded that no due diligence had been performed on SSI and that Carstens and Kellerman had been misleading in their claims that due diligence was performed and had possibly committed fraud. Gobodo also conducted a comparison between SSI’s price per carat and two price indexes (Zimnisky and Bloomberg). The comparison revealed that, between 2015 and 2017, Zimnisky and Bloomberg’s average US$ selling price was 12.27% and 9.47% (respectively) higher than SSI’s. Between 2017 and 2018, Zimnisky’s average US$ selling price was 22% higher than SSI’s.

Gavin Craythorne, a marine mining contractor and founding member of the Equitable Access Campaign (an organisation working in the interests of marine mining contractors in Richtersveld), maintains that SSI’s selling price was marketed at 30-40% of the diamonds’ true value. However, he was not considered an expert witness by the Zondo Commission and, given his financial interests, could not be considered completely objective.

2020

In February, in accordance with Gobodo’s recommendation that disciplinary action be taken against Carstens, he was suspended from his job as the PSJV’s CEO. The Commission for Conciliation, Mediation and Arbitration later awarded him a R3.2m settlement, citing that the process had been unfair.

2021

2022

The SIU is also authorised to initiate civil actions in the High Court or a Special Tribunal in its own name to address any wrongdoing discovered during its investigations that stem from acts of corruption, fraud or maladministration. The SIU will forward any evidence of possible criminal conduct uncovered during its investigations to the National Prosecuting Authority (NPA) for further action.

In September, a judgement was made concerning Korabie’s application to have the Zondo Commission’s findings against him set aside and reviewed. Korabie’s affidavit to the court claimed that the unjustified negative findings and recommendations violate his right to dignity and interfere with his ability to practice law. The High Court ruled that Korabie had not made a case for the relief he sought and the application was consequently dismissed.

2023