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Ausdex Diamond Exchange
Ausdex Diamond Exchange
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Online diamond business closes after bankruptcy

After the recent liquidation of Diamond Exchange another online diamond business has closed after one of its founders declared bankruptcy before Christmas and the website was taken offline on Tuesday. 

After months of confusion over the Geelong-based Ausdex Australian Diamond Exchange, the website has finally ceased operating. 

Australian Securities and Investments Commission (ASIC) records still list Francine Gumina as the sole trader of Ausdex Australian Diamond Exchange, even though she was declared bankrupt on December 14.

Gumina lodged a Debtors Petition to the Insolvency and Trustee Service of Australia, which shows she had debts in excess of $110,000. 

The diamond trading platform - ausdiamondex.com.au – launched in 2009, when it began marketing to the trade. Membership to the platform was $1,000.

Ausdiamondex.com.au originally listed its address as Level 27, 101 Collins St, Melbourne, which is in fact a serviced office. It also had a 1300 phone number but late last year the number was disconnected even though it still appeared on the website.

In July last year an ad was posted on a free classifieds website offering the business for sale at $50,000. The ad read, “Ausdex Australian Diamond Exchange - The First Diamond Trading Network in Australia (Trade Only)” and provided the contact details of Francine Gumina. (See image gallery.)

After concerns about the business at that time Gumina advised Jeweller that Ausdex had been sold though she would not provide details of the purchaser’s identity. The website remained active but at around that time, the business’s Geelong phone number was disconnected and emails began to be answered by a person named “Daniel”.

Interestingly, last October ads began appearing on various websites for another, similarly named business - Ausdex Diamond Pty Ltd. The ads were seeking investors for an Australia-based diamond processing plant. One read, “Ausdex Diamonds is positioned to become Australia’s first diamond manufacturer.”

Another advertisement was seeking US$8 million in venture capital funding and stated, “There are no diamond processing plants in Australia. Ausdex will start a new industry here by starting a diamond processing plant.” (See image gallery.)

The ads declared, “A robust financial model for Ausdex has been completed by Pitcher Partners, a top-tier accounting and consulting firm. Ausdex Diamonds is projected to have gross revenue of $17.2m by Year 3 of operation,” but a spokesman for Pitcher Partners denies making any financial projection.

Matthew Pringle, a partner at Pitcher Partners, said that his company no longer acts for Ausdex, adding, “All we did on their [Ausdex Diamond’s] instructions is build a financial model. We haven’t verified the accuracy or integrity of the model at all. All the underlying assumptions and data is theirs.”

Pringle said he was familiar with the wording of the ad and that all attempts to contact Catalini, had failed. “We sent a letter asking them to cease the ad,” Pringle said.

ASIC records list Alessandro Catalini as Ausdex Diamond’s sole director and the business address as Rollins Road, Geelong. Catalini is the brother of Gumina and the address is Gumina’s home. Catalini describes himself as a qualified jeweller, diamond merchant and gold trader. A printed prospectus-style advertisement for Ausdex Diamond Pty Ltd states: “Sandro has been involved in the jewellery industry for his whole life as part of a 58-year-old family business, providing him with an extensive list of contacts in the closed jewellery community.”

Catalini is also registered as the sole trader of Geelong Diamond Company, another business that ceased trading. An ad offering the business for sale still appears online even though, according to the broker who was commissioned to sell it, Geelong Diamond Company simply closed. (See Update below)

Prospectus-style ad
Prospectus-style ad

As late as December the Ausdiamondex.com.au website stated, “Ausdex Australian Diamond Exchange is under new management. This site is currently under development and we will not be taking on new members until further notice. Current members are able to continue to trade as normal.”

Prior to Christmas emails to Ausdiamondex.com.au were answered by “Daniel” who advised, “We are under new management, if you could fill in the application on the site and submit once you have completed it [we]  will send a notification.”

On December 19, just a few days after Gumina’s bankruptcy notice, the website’s home page read, “IMPORTANT NOTICE - Recent enquiries made to this site suggests that people may be confused about whether Ausdex Diamond Exchange is operating. To avoid doubt we advise that no membership subscriptions are being taken and no payments for subscriptions will be accepted. This website is under re-development until further notice. We have taken the step of removing any information that has given the impression that the site is active in any way.”

It is unknown whether members have been refunded and various attempts by Jeweller to contact Catalini, including making contact with his accountant, proved unsuccessful. Ausdiamondex.com.au was taken down two days ago and the website’s developer, David Plunkett, confirmed that he was instructed by Catalini to close the website on January 25.

Clarification – story updated 5pm, Friday 25 February 2011  

Jeweller has been contacted by Mr Catalini of Geelong Diamond Company advising that information provided to Jeweller last month was incorrect. He advises that Geelong Diamond Company has not ceased trading and the information provided by the business broker engaged to sell the business was incorrect. Mr Catalini has informed us that Geelong Diamond Company moved premises from Suite 2, 157 Moorabool Street Geelong Geelong and is now located at Suite 6, 147 Ryrie Street, Geelong and operates online. 

It should be noted, however, that even though the Geelong Diamond Company still operates, our previous report that the phone number (03 5221 2665) was disconnected is correct and although the business’s old address details still appear on yellowpages.com.au, according to Telstra directory assistance and whitepages.com.au, there is no new phone number listed for Geelong Diamond Company. Jeweller regrets the misunderstanding but it should be noted that we went to extraordinary lengths to contact Mr Catalini prior to publication to verify a number of issues and had he returned calls, the confusion could have been avoided. We have since asked Mr Catalini a number of new questions and he has informed us that is under no obligation to respond.

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