The Shefa Yamim company has been prospecting for diamonds in Israel's Kishon River since 1999. In the coming months, the firm is seeking to issue $100 million worth of stock. This is a new and different approach, since fundraising for diamond companies – especially Israeli ones – is done via banks and going public has never been an option.

According to TheMarker.com, The story of Shefa Yamim began in 1988, when Haifa's then-mayor, Arie Goral, traveled to New York to meet with the Lubavitcher rabbi who was the seventh Chabad admor and considered by many to be the Messiah, but has since passed away. The rabbi gave Goral a tip: "Haifa sits on the sea, and one shouldn't be impressed by depth. Haifa has a sea, and it has a valley, and the valley contains good and precious stones. The Lord has done something miraculous: he has hidden the stones deep in the earth, and it looks like they're deep in the river."

The 86-year-old rabbi's mention of "good stones" sparked considerable interest among the Chabad hassidim. They accepted it as prophecy, and decided to devote their time and money to finding the buried treasure.

The founder and CEO of Shefa Yamim is Avraham "Avi" Taub, who comes from a family of diamond dealers and worked his whole life polishing an selling diamonds. Sources close to Taub said he was so close to the rabbi that he decided to leave everything and devote his life to Shefa Yamim. In the early 1990s, the Lubavitcher rabbi instructed Taub to mine diamonds, which together with the prophecy, prompted Taub to found Shefa Yamim. The company took out mining licenses for the Zevulun Valley and Mount Carmel areas and began searching.

First name? Kalish, a former IAF pilot who found religion, is one of the more colorful and well-known figures in Israeli high-tech. In 2007 Forbes named him the best local venture capitalist. But he has also known some failures. 

Shefa Yamim employs dozens of workers and two vehicles. The company has some 200 stockholders, most of whom own shares in the company. The main stockholders are Eight Global Corp. (42.33%) and the Taub family's 101 Zahav Holdings (7.2%), which also has a number of other companies in the diamond, gold mining, and precious stones industries.

Thus far, some $10 million has been raised from private investors, but it doesn’t seem to be enough. In recent weeks Shefa Yamim has been busy preparing a draft prospectus for the securities authorities ahead of the stock issue. This isn't the first time Shefa Yamim has tried to issue stock. Before the global financial crisis took hold, the company tried to issue stock on London's AIM exchange but then reversed the decision. Right now, the worth of the company is a sticking point – Shefa Yamim wants to issue stock based on the $100 million valuation by Mount Morgan Resources.

The signatories doubt whether they will be able to raise money based on a $100 million company valuation, and a source said that "if the company had been interested in raising money based on a value of nothing, we would have taken the opportunity."

Shefa Yamim is the first and only company prospecting for precious stones in Israel. Anyone reviewing the history of searches for gold and gemstones in the Holy Land will see that searches for gold were conducted in the Eilat area, but called off. The company operates under the mining regulations of the National Infrastructures Ministry, and unlike companies prospecting for oil or natural gas – established as cooperative ventures – does not receive any reduction in income tax.

Over the past 11 years, the company has conducted a number of exploratory drills, which did not reveal the promised wealth, but turned up a number of other interesting things. In 2004 a kimberlite boulder was discovered on Mount Carmel. The De Beers syndicate took the rock to its laboratories, cut it open, and discovered micro-diamonds.

Shefa Yamim has discovered 76 diamonds, mostly micro-diamonds, and 14 kimberlite boulders. In addition, a few other precious stones – sapphires, rubies, emeralds, kainite, and corundrum. At the moment the company is not drilling, and the next plan is to drill into the kimberlite layer.

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The Israeli Diamond Industry is in an uproar over a $50 million fraud that occurred in the offices of an Israeli diamantaire in Hong Kong.

"They did a real sting operation on me in Hong Kong, the whole office was involved," Shlomo Fastag, a diamantaire who a week ago reported to the Diamond Exchange that he had amassed debt because of a sting operation, told The Marker.

Speaking for the first time about the Hong Kong scandal, Fastag said that five office workers had been involved in the heist. "The police are investigating and said that they have recordings. They sold the diamonds to stores cheaply and apparently got something 'under the table.' I don't know what the total value was, that's still being checked. I'm still in the dark. We don't know what did and didn't happen. My partner there and his partner are checking store inventories. It's a long process," Fastag added.

Industry officials added that heists in the offices of Israeli diamantaires are relatively rare, in a business based on trust between owners and their employees. For that reason, diamond dealers generally prefer to employ family members and even send them abroad to live and handle the local business. "Trust is very important and fundamental in diamond dealers' offices," the officials said.

"Diamantaires are typically very suspicious of their employees and check what they're doing carefully – including with whom they talk on the phone, where they go, whom they meet with and so on. An employee of a member of the Israeli Diamond Exchange undergoes an in-depth background check before he receives an ID tag. That's why this fraud seems a little strange to Israeli diamantaires – maybe for a good reason," the sources continued.

As soon as Fastag contacted the Diamond Exchange, President Avi Paz launched the appropriate protocol: Fastag's name and picture were posted on the bulletin board and the Bourse called in all Fastag's creditors for a meeting.

The talks revealed that although Fastag had reported debts to diamond dealers in Israel totaling $7 million, the creditors had arrived at a total debt of NIS 6 million (approx. $1.56 million). The debt-paying process is progressing according to standard procedures. 

According to Diamond Exchange assessments, Fastag's debts in Israel and abroad range $25-$50 million. However, diamond dealers are saying that everything is based on rumors, rather than on information from official sources. Some have expressed doubt that there was any sting operation in Hong Kong at all, and wonder whether Fastag's report might not be an attempt meant to avoid paying his debts.

Fastag said in response: "Why are they saying I owe 50 (million dollars)? That's nonsense. Why don't they say I owe $200 million? It's just people slinging mud. Ninety five percent of the public is behind me. There are always 3-4% who like to sling mud. Senseless hatred, that's why the Temple was destroyed. There's a committee investigating it in Hong Kong. It's not by chance that most of the public is behind me. I've been here for 30 years, I've helped a lot of people, and now there are good people who want to help me."

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Is it a cell phone, or is a fabulous piece of diamond jewelry? As if the iPhone wasn’t a desirable enough item, causing fans to queue up every time a new model is launched, Liverpool luxury retailer Stuart Huges is now selling a limited-edition diamond-studded iPhone 4.0.

 
The 50 phones in the iPhone 4 Diamond Edition glitter not only with the halo associated with Apple products, but with 6.5 carats of individually-set diamonds. The phone's case is solid platinum and the Apple logo is rendered in – what else –  diamonds. The phones retail for $20,000 each.
 
If users can tear their eyes off the diamond bling for long enough to consider the phone's specs, they might be interested to know that the iPhone in question is the 32GB model and leaves the factory unlocked - which means that the jet-setting phone fans cans use their iDiamonds anywhere in the world.
 
Just to sweeten the deal, the diamond-encrusted iPhone 4 comes with a handcrafted wallet of Ostrich foot.

 
The iPhone 4 Diamond Edition is truly a paradigm of fine diamond jewelry design meeting technology. Although one does wonder what will happen when it's time to upgrade to a new model phone. Will jewelers or diamond dealers offer trade-ins?
 
Is the diamond-studded iPhone the new must-have accessory? Would you buy one? Leave your comments below.

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