Pala Investments Holdings Limited announced this week that three of Rockwell Diamonds' minority directors have reversed their opposition to a rights offering in the attempt to takeover the Canadian/South African diamond miner.

In a statement to the media, Pala said it "set the record straight" on the Rockwell bid, and "highlights the recent flip-flops of the minority directors David Copeland, John Bristow and Mark Bristow."

Pala currently holds a 19.9% stake in Rockwell and conducted an unsuccessful bid for control of the diamond miner late last year.

According to the statement, the three minority directors, who previously supported a private placement, now favor a rights offering.

"This is particularly remarkable given that since February and as recently as late April the minority directors have repeatedly proposed a private placement as the sole means of conducting a financing for Rockwell," the Pala statement said.

The Jersey, Channel Islands-based investment company said that the minority directors reversed their position only after a recent shareholders meeting where it pled the case for a rights offering over a private placement.

In the harshly-worded statement, Pala said the three directors also reversed their position on seeking $8 million to $10 million in financing, and settling for only $3.5 million "to avoid the required shareholder approval for a larger more dilutive offering, which they know they are unlikely to receive."

Jan Castro, Managing Director of Pala Investments AG, suggested replacing the three directors with three new South African nominees, and said that the new combined board "will bring the experience and capabilities required to properly assess Rockwell’s financial needs, conduct an appropriate financing and restructure Rockwell,” a task the board, in its current form, is not capable of doing.