Lev Leviev has struck a deal to sell 18% stake in Angola’s Catoca diamond mine company to a Chinese company called China Sonangol, according to a letter by president of Russia’a Alrosa Fedor Andreyev to finance minister Aleksey Kudrin, who chairs the supervisory board of Alrosa.   

The deal secured, Chinese-Angolan alliance takes control of Catoca company. China Sonangol is about to become first Chinese company ever to own an indigenous diamond deposit in Africa (and one of largest in the world). The experts say that the purchase, made by China, the second largest consumer of diamonds, might be significant for the world diamond market.     

Fedor Andreyev informs the Ministry of Finance that lawyers of Alrosa are working on an opinion letter. They want to assess legitimacy of the deal in terms of Angolan law and the company’s charter. Both the law and the charter grant the priority right to purchase stakes in the company to the shareholders of Catoca

Even if Alrosa decides to bring a motion against the deal, it is unlikely that the court overturns the agreement. Lev Leviev resorted to a widespread trick. A loophole  helped him to avoid the necessity to make an offer to the shareholders. He sold not the asset itself, but an off-shore company which owns the asset, worth $400m. 

According to the dossier of the Russian Mafia (rumafia.com), Lev Leviev bought Catoca from Alrosa for $20m at the end of the 1990s, when Alrosa faced financial difficulties due to the fact that there were no export quotae.  

Catoca diamond mine (A Sociedade Mineira de Catoca Lda) was established in 1992 to mine a volcanic (kimberlite) pipe of the same name. Lev Leviev’s Daumonty Financing owned 18% of the company. 32.8% belongs to the state company Endiama, another 32.8% - to Alrosa, the rest to - Brazilian Odebrecht.

Established in 2004 China Sonangol, based in Hong Kong, is the largest consumer of Angolan oil. The company is engaged in a number of construction projects in Angola, such as a new international airport in Luanda (Loanda), which is to become the largest in Africa.