Terms and conditions listed on the Diamond Exchange website
Diamond Exchange stops trading
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Online jewellery retailer Diamondexchange.com.au has stopped trading after it was hit with an application to wind-up the company.
The application, filed on September 15 with the Victorian Supreme Court, came from a single creditor. Following the application, the prominent online jewellery retailer decided to stop trading for two days. Diamond Exchange is not accepting any new customer orders but chief financial officer Simon Middleton told Jeweller the matter could be resolved by Wednesday.
“We’ve had discussions with them [the creditor] this morning, so hopefully we can find some level ground. We think that it’s appropriate that when there’s a winding-up order, and even though we dispute it [the order], that it’s not appropriate to be trading so we will re-open on Wednesday.”
Middleton added, “We’re a strong business, we think it’s responsible to close for a couple of days to sort out the matter and that way we’re not misleading customers. It’s also important from our perspective and an industry perspective that we do the right thing.”
He said the wind-up application – which, if successful, would mean forcing the company into administration and possible liquidation – came from a marketing company for media consultancy work and some of the debt is disputed.
However, Supreme Court documents seen by Jeweller state that Timothy Stanford of Morgan Trusscolt Capital (MTC), who is claiming an amount of $235,923.38 relating to a loan agreement entered into in October 2009, made the application.
MTC’s website states that it, “uniquely facilitates investment in growth programs. In a space dominated by service agencies that charge fees based on time and materials, our returns are based on our client’s business growth. As a marketing Venture Capitalist, Morgan Trusscolt Capital does not take risks lightly.”
MTC has appointed insolvency specialist Romanis Cant, a Melbourne based firm of chartered accountants.
Speaking to Jeweller on Monday, Middleton was hopeful that the matter would be quickly resolved directly with the creditor without the need for legal action. “We expect to have the wind up matters resolved in the next few hours, we hope to have it withdrawn,” he said.
However, Middleton added, “We’re disappointed for our clients, particularly those who have purchased in the last 10 days or so, and who are awaiting diamonds, that are a bit anxious now. We’re certainly disappointed that they’re feeling uneasy, but we’ve got a team of people contacting our clients reassuring them about what we’re doing and how we’re going, etc. And it should be business as normal on Wednesday and we look forward to service of excellence to the public.”
The matter first came to light when Jeweller discovered that the Jewellers Association of Australia (JAA) was considering taking action against one of its members, an Australian diamond company, after a spike in consumer complaints about the business.
JAA chief executive Ian Hadassin confirmed he had been dealing with consumer complaints about the company concerning two things; the late delivery of product and a lack of refund or the length of time taken to refund money for items that had been returned.
“It seemed to be out of proportion with the usual number of complaints we receive about any particular company. We received six to eight about this business in a four-week period. That’s a lot,” he explained.
The JAA began working with consumers and Diamondexchange.com.au to expedite refunds and at the time of publication, Hadassin believed all refunds had been made.
Middleton said he believed all refunds were now completed and there had been no new claims. “Obviously with adverse publicity we might get some (new claims) but all existing refunds have been followed up,” he said.
Diamond Exchange is a public company yet there is no mention of the wind-up application under the Company Announcements section of its website. The Australian Security and Investments Commission (ASIC) confirmed that there was no legal requirement for Diamond Exchange to publicise the application for wind-up notice on its website.
An ASIC spokesperson said because it was public information published on the ASIC website, there was no section under the Act with which the company directors must comply because there had been no liquidation orders made by a court.
Diamond Exchange’s website page states: “Our international list of affiliations ensures that we are ethically bound to deliver a high quality of service. Our reputation within the industry dates back several generations, which allows us to offer distinct marketing advantages associated with an international diamond infrastructure.”
The website promotes the qualifications and expertise of its directors and shareholders, providing extensive professional information about them, but no director is named or listed on the site.
The Supreme Court documents list Diamond Exchange’s directors as Wayne Soloman, James Francis and John Buckby.
Editor's note: Anyone who requires assistance on any matter regarding Diamond Exchange or other issues concerning jewellers, contact JAA on 02 9262 2862.
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Posted September 20, 2010