The purchase of an Australian diamond company fell through last week, in part because the firm's chair defected to the side of the bidding company during the process, The Australian reports. As Singapore investment firm InnoPac Holdings attempted to acquire support from the 90% of shareholders in Merlin Diamonds needed to secure the deal, Merlin's chair and managing director Joseph Gutnick was revealed to have purchased a major stake in InnoPac soon after the former revealed its intentions to acquire Merlin.



At the same time, it came out that Gutnick had sold most of his own holdings in Merlin, leaving him with only 1% of Merlin's shares. Throughout this time, Gutnick implored other Merlin shareholders to agree to the deal, although his interests now lay not with them but with the purchasing firm.



One month ago, diamond company North Australian announced that it had changed its name to Merlin, after the diamond mine it was starting up again folllowing a decade-long hiatus. It also announced that it had secured $18 million to fund continued production there. Gutnick then said that production was to begin by the end of this month at an annual rate of 150,000 carats and was to gradually be increased to 250,000 carats.