Ya'akov Almor

WHAT’S BEHIND THE NEW GHI GEMOLOGICAL LABORATORY IN NEW YORK?

Earlier this year, it was announced that the diamond grading reports of the new IIDGR lab of De Beers and GHI Gemological Laboratory, headquartered in New York, will be listed on RapNet.

GHI Gemological Laboratory, however, is owned by the same entity that owns EGL USA. Both in New York and Los Angeles, the GHI and EGL USA premises are located in the same building and on the same floors, in very close proximity.

Since October 2014, RapNet has banned diamonds accompanied by grading reports that carry the name EGL from its RapNet listings. This was the result of a widely reported scandal that had the Ramat-Gan based laboratory EGL International at its centre. The lab had been issuing diamond grading reports that grossly overstated the colour grade of diamonds it issued reports on. The scandal broke when an American retailer sued the lab after a retail customer had lodged a formal complaint and lawsuit against the jeweller. The trade, so it seems, had been happy to submit its diamonds to the lab and was aware of its grading practices.

So is EGL USA circumventing Rapnet’s ban on EGL USA reports – on any EGL reports – by shifting its business over to GHI reports? Saville Stern, RapNet’s COO, was quoted by National Jeweler as saying that “there is ‘absolutely no way” RapNet will be “listing any EGL-graded diamonds again, including EGL USA,” adding that “the EGL brand is completely banned from RapNet.”

In an email exchange with Deborah Jakubovic, Executive Manager of GHI Gemological Laboratory, Jakubovic said GHI and EGL USA are separate gemmological laboratories with a single owner. However, she did not answer a follow up question: “Are [the] diamonds submitted to GHI graded by the same team of gemmologists as EGL USA? If so, do the GHI clients know that?”

The question: Is a name change enough?

During the past year, Menahem Sevdermish, the global manager of the laboratory group rebranded as EGL Platinum, has worked quietly and under almost complete radio silence, reorganizing the brand.

Following the infamous “overgrading” saga, Sevdermish and EGL Platinum have gone further than any other lab: it closed and completely erased EGL International, the franchise that had committed the transgressions that led to the RapNet ban, and reorganized and re-accredited all of the brand’s remaining branches, assuring that every lab – in Johannesburg, Cape Town, Ramat Gan, India and Taiwan – all fastidiously follow EGL Platinum’s stringent grading rules. Note that the CEO of the lab in South Africa, Alan Lowe, is an officer of the International Diamond Council, the diamond industry and trade’s watchdog of diamond grading and nomenclature.

In a comment, Sevdermish said the revision of the EGL Platinum website will be completed within the next few months, reflecting the enormous efforts that have been undertaken during the past year to repair the reputational damage that has been suffered.

Obviously, it would have easier for Sevdermish to just institute a name change. But, as he says, “The EGL Platinum brand has tremendous value and it will continue to offer its services successfully and impeccably to the trade.”

During the past year, scandal upon scandal has hit the gemmological business community, most often affecting the industry’s leading lab. We’ve not seen a lab closure, not heard about the complete removal of lab managers or gemologists, and there has not been a banning of reports issued by the specific lab in question – and certainly no name change!

Maybe it is time to allow constructive actions to speak clearer and more convincingly than name change constructions. And maybe it is also time for the industry, including RapNet, to look at the new EGL Platinum laboratories reports with fresh eyes, and without prejudice.
By: Ya’akov Almor

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