AR-NJ-AntwerpResignations-012006

Antwerp in flux as politicians leave HRD board

By Susan Thea Posnock

JANUARY 19, 2006 - , -- The HRD Antwerp World Diamond Center, umbrella organization for the Belgian diamond industry, lost important government support late last week as several key politicians resigned from the organization's board of directors.

Camille Paulus, governor of Antwerp; Patrick Janssens, city mayor; Leo Delwaide, deputy city mayor; and Luc Van den Branden, people's representative, all left the board. HRD officials said the government reps did so because they were concerned about the shift of power from big to small players within the organization.

The exodus follows recent tumult, including the resignations of HRD managing director Peter Meeus and board representatives Chaim Pluczenik, Dilip Mehta and Jacques Claes, all representing larger diamond companies.

"The politicians' signal was clear: Find a way of solving your internal issues," says Youri Steverlynck, head of HRD general services, diamond office, public relations and contacts with authorities.

Steverlynck is one of three HRD managers who are temporarilyy overseeing the organization until a replacement is named for Meeus. Five new trade group members were elected to the board last week: Kurt Einhorn, Daniel Van Dievoet, Bahrat Shah, Daniel Horowitz and Ziv Knoll.

"There have been very strong tensions for many months amongst the representatives for the trade group," Steverlynck says, adding that the board's balance of power has shifted away from larger Diamond Trading Co. (DTC) sightholders.

Sightholders are now represented by just one company, Star Diamond (there are 20 board members in total). The political directors resigned in order to express their concern over the changes, Steverlynck says.

"They said HRD has to find a new and good balance between the interests of the big companies and the smaller," he says.

Mehta, CEO of Rosy Blue, says there's been anti-major player sentiment in Antwerp.

"There's been a lot of attacks," he tells NATIONAL JEWELER, explaining his decision to resign from the board. "The negative propaganda [against sightholders] was too much and it was time for me to reflect over it."

Most notable was a lawsuit filed by the Belgium Polished Diamond Dealers Association (BVGD)—dismissed by an Antwerp court&3x2014;which had argued that trade representatives on HRD's board had not been legally elected. The group also lodged complaints to the European Union against DTC's Supplier of Choice program.

In a letter posted on BVGD's Web site, the group says it isn't against big players and feels they are essential to Antwerp's success. But the organization says the changes in the trade group's representation toward smaller players reflect "the wishes of the 1,100 diamond companies in Antwerp who continue to prosper in our river city."

One of the facts complicating the issue is that while there are far more smaller- to medium-sized diamond companies in Antwerp, the larger players control a significant portion of the business. Andre Gumuchdjian, who recently resigned as president of BVGD, says the group is seeking balance.

"One of our main concerns was that HRD wasn't representative of the market and there were too many sightholders, and not enough independents and medium and small enterprises were not represented," he says.

Mehta expressed approval of the political moves.

"I'm very grateful to the political world," he says. “They understand proper representation is necessary.”

According to Steverlynck, says the first meeting of the new board will be held Jan. 23.