A city councillor’s family company is being sued for more than $1.6 million, after allegedly failing to make loan payments and keep up with bills for 352 carats of diamonds.
One dispute dates back to February 2011, when Embee Diamonds purchased more than one million dollars worth of raw diamonds from I.D.H Diamonds, a wholesaler based in Belgium. Embee paid a first instalment, but neglected to settle the balance and subsequent interest charges. According to the Belgian company, the debt climbed to $732,779 USD (about $980,000 CAD).
A second company, registered as 2342543 Ontario Ltd., filed a suit against Embee earlier this month, seeking to recover a $500,000 loan and $129,863 in interest.
Councillor Evert Botha is the chief operating officer of Embee Diamonds, which is also involved in a long-running property tax dispute with the city. His family owns a majority stake in the business.
The councillor said adverse market conditions delayed repayment to both companies.
“All of this comes down to cash flow,” he said in an interview. “This market is up and down and we made the tough choice over the years about whether we would keep our staff employed.”
Embee has recently attracted new investors, according to corporate filings, and Botha said they are raising money that will allow the company to repay its debts.
“The important fact is that the new shareholders are committed to securing funding,” he said, “which will enable us to deal with all of our current obligations.”
Botha and his father Mike acknowledged the debt to the Ontario company on April 11, 2016, according to court documents. The loan dated back to 2013.
“It’s a transaction that, in this case, went wrong,” Botha told the Daily Herald.
But the Belgian dispute has led to a long battle of claims and counterclaims.
For more on this story, please see the April 19 print or e-edition of the Daily Herald.