Businessweek Archives

Could It Be A Diamond Ring?


In Business This Week

COULD IT BE A DIAMOND RING?

After a two-year Justice Dept. investigation, a federal grand jury in Columbus, Ohio, indicted General Electric, DeBeers Centenary, and two of the companies' employees on Feb. 17 for allegedly fixing the price of industrial diamonds. GE Chairman Jack Welch learned of the planned indictment on Feb. 14, in a meeting with Justice antitrust chief Anne Bingaman. Two days later, former GE executive Edward Russell--whose complaints triggered the federal probe--denied having any direct knowledge about the alleged wrongdoing in a settlement of his separate civil suit charging GE with wrongfully discharging him.

GE contends the U.S. case is based on circumstantial evidence alleging that defendants Philippe Liotier, former chief executive of Brussels' Diamant Boart, and Peter Frenz, a GE employee in Frankfurt, sent each other plans for price increases by DeBeers and GE, respectively. While DeBeers owns 20% of Diamant Boart, GE claims that Diamant Boart is merely a GE customer and that price discussions between customers and suppliers are legal. The U.S. says Liotier was acting on behalf of DeBeers.EDITED BY KEITH H. HAMMONDS


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus