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De Beers said to hire leak hunter to probe gem data breach

London - The world’s biggest diamond producer hired an external investigator to find the source of possible leaks of its most sensitive price data, according to people familiar with the matter.

De Beers hired investigators from KPMG International in South Africa to find the source of the leaks, according to the people, who asked not to be identified because the matter is private.

The company suspected at least one employee sold pricing information to customers before the diamonds were offered for purchase, the people said.

A spokesperson for De Beers said the company had conducted an internal investigation, and declined to comment on KPMG’s involvement. A spokesperson for KPMG in South Africa declined to comment.

“We’ve been aware of rumours of information sharing in the industry and undertook an investigation,” De Beers said in an emailed statement to Bloomberg. “While we didn’t find specific evidence that any of our intellectual property was intentionally shared externally, we have taken steps to tighten internal controls around access to, and communication of, commercial information.”

De Beers tightly controls the buying process for its diamonds and the pricing intentions are a company secret. The miner holds 10 sales a year in the Botswana capital of Gaborone, known in the industry as sightholder sales.

During the event, a select group of about 80 customers is allowed to inspect the diamonds and De Beers discloses prices. As part of an agreement with De Beers, the buyers must purchase the diamonds at the set rate without negotiating.

If someone knows the prices prior to the sale, it’s possible to make money by buying or selling inventory beforehand. There’s an active secondary market for the company’s packets of diamonds by trading companies and manufacturers that aren’t invited to the sale events. They will usually buy diamonds at a premium closely linked to De Beers prices.

This is not the first time De Beers has investigated pricing issues. In 2014, the company launched a search into how documents with diamond valuation data and customer details was leaked to the market.

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