Harry Winston Sued By Etaki Diamond Mine Stockholder
After the announcement of its US$1 million deal with Swatch to sell its jewelry division, Harry Winston Diamond Corp finds itself back in the news spotlight. This time, the Toronto-based diamond mining company is being sued over the sale and purchase of the Etaki Diamond Mine.
The Ontario Superior Court of Justice received an action today by Charles Fipke of C. Fipke Holdings LTD, a geologist who discovered the Canadian Etaki mine in 1991 and holds a 10-percent interest in it. The legal action is to prevent the Harry Winston company from purchasing 80 percent of the diamond mine for $500 million from BHP Billiton, a Melbourne-based company who is the current owner of the Etaki mine. The deal also included the purchase of BHP’s gem marketing operations.
The lawsuit claims that Fipke wants the court to block all sale proceedings of the Etaki mine, citing that BHP violated Fipke’s rights in a joint-venture agreement to buy the Etaki mine first from BHP. Fipke, a minority shareholder, had the preemptive right to purchase the mine from BHP when it was put up for sale, according to a BHP statement on November 13. But Fipke believes he was prevented from seeking financing due to Harry Winston’s interference when the diamond mining company made its own debt financing arrangements for the mine acquisition.
Two other parties are also named in the lawsuit: Dr. Stewart Blusson and Archon Mineral Rights. They are also minority stakeholders in the Etaki Mine. Neither party has contested the deal between BHP and Harry Winston.
BHP Billiton and Harry Winston both claim the Fipke lawsuit is without merit and that they will defend the action so they can proceed with the Etaki mine deal. All parties have agreed that they want this case expedited through the court system so they can receive a final ruling before April 15. This will allow the sale and purchase of the Etaki mine between Harry Winston and BHP to be completed before May 15 if the courts rule in their favor.
Michelle H for Raymond Lee Jewelers, premiere fine jewelry and luxury watch boutique and buyer.
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