The company Letseng Diamonds (also known as Letseng Guernsey) was formed to exploit diamond mine at Letseng, South Africa, which has very mixed and turbulent history , including abandonment by two big mining companies – RTZ (Rio Tinto) and De Beers. Currently Letseng Diamonds, represented by London-based lawyer and investor Montague Koppel, is involved in the litigation regarding the Investec Loan Agreement (ILA), embedded in JCI Limited (previously Johannesburg Consolidated Investment Company Limited – a public company incorporated in South Africa in the 19th century with registration number 1894/000854/06).
Until recently JCI held a stake in Letseng. Currently 20% of JCI is effectively controlled by Koppel, through Letseng Diamonds (8.7% of JCI voting shares)Â and Hawkhurst Investments Limited (10.4% of JCI voting shares). On 28 September 2006 Letseng Diamonds brought an application against:
- JCI Limited,
- Investec Bank Limited (a public company incorporated in South Africa with registration number 1969/004763/06),
- JCI Investment Finance (formerly Lexshell 658 Investments (Proprietary) Limited), private company incorporated in South Africa as a wholly-owned subsidiary of JCI with registration number 2005/021440/07),
- the JSE Limited (previously the Johannesburg Securities Exchange, the largest stock exchange in Africa),
- and Gem Diamond Mining Company of Africa Limited – an entity registered in the British Virgin Islands with registration number 66975, and controlled by Clifford Elphick.
The company objected against the way how Investec hoped to earn the profit share fee from JCI. The Hight Court of South Africa granted an interdict against the Investec Loan Agreement being voted on at a JCI shareholder meeting.
However, JCI shareholders decided to sell the company’s stake in Letseng Investment Holdings South Africa (Proprietary) Limited (LIH) (a private company incorporated in South Africa with registration No. 1998/023466/07), which held an adjusted 70% of the Letseng mine itself. The purchaser of the stake for R880m in cash was BVI-based Gem Diamond, the deal was effective on 1 July 2006.
The 70% stock of the mine was 50% held by JSE-listed Matodzi Resources Limited (a company incorporated in South Africa and a 58% subsidiary of JCI, registration No. 1933/004523/06), 40% by JCI (suspended from the JSE on 1 August 2005), and 10% by Koppel. The Lesotho government owns an adjusted balance of 30% (previously 24%). The recent ownership structure can be traced to 1996, when Letseng Diamonds hit the scene.