International Business : Yeltsin Fires Top Russian Diamond Official

President Boris N. Yeltsin fired Russia’s top diamond official Wednesday for alleged links to a shadowy deal that siphoned off millions of dollars in uncut gems through a San Francisco company called Golden ADA.

Yeltsin’s office said the president dismissed Yevgeny Bychkov, head of Russia’s Committee on Precious Metals and Stones, for “poor discipline.”

The news reached Bychkov while he was in negotiations with South African diamond giant DeBeers Consolidated Mines Ltd.

DeBeers runs the cartel through which Russia and other major diamond producers market most of their stones. Russia’s contract with the cartel has expired and the talks are aimed at reaching a new agreement.

Russia, which exported about $1 billion in rough gem diamonds in 1995, is one of the world’s biggest producers of diamonds.

Bychkov’s firing was one of a flurry of dismissals by Yeltsin on Wednesday and comes only days after the president promised in a campaign speech to act against official corruption. He specifically mentioned Bychkov.

Bychkov already faces charges of exceeding his authority and violating currency regulations in a 1993 deal with Golden ADA.

Russia shipped hundreds of millions of dollars’ worth of rough diamonds to the company for cutting but got neither stones nor money in return. Bychkov has sued Golden ADA, and a California court has frozen the company’s assets.

Bychkov, 61, has denied wrongdoing and said that if convicted, he is entitled to a special amnesty for participants in World War II.

Yeltsin’s decree allows Bychkov, who is a year past the official retirement age, to draw a pension. But it also accuses him of “poor personal discipline in executing the president’s and government’s orders.”

It was not clear what effect the decree would have on Bychkov’s role in DeBeers negotiations. Bychkov was not available for comment Wednesday, but his secretary said he continued to take part in the talks.

Bychkov is a pillar of the opposition to the huge cartel, and articles have appeared recently in the Russian press speculating that DeBeers may be connected to charges against him.

Bychkov has said he wants to increase the share of uncut gem diamonds that Russia sells directly on the world market; it now stands at 5%.

He has also put together an ambitious plan to build Russia’s domestic diamond-polishing industry. He recently went to Namibia, another big diamond producer, to discuss joint action for more independence from DeBeers.