Sri Lanka’s Serendipity Sapphire is to be auctioned off in Dubai by Sotheby’s.
The Morning: The Serendipity Sapphire, which entered the Guinness Book of World Records earlier this year as the world’s largest sapphire with an aggregate weight of 503.2 kg, is set to be auctioned off in Dubai by Sotheby’s before January 2023, according to the National Gem and Jewellery Authority (NGJA).
Speaking to The Sunday Morning Business, NGJA Chairman Thilak Weerasinghe revealed that the owner of the sapphire cluster was currently in the process of entering into a Memorandum of Understanding (MoU) with Sotheby’s to auction it in Dubai.
The sapphire will be transported to Dubai during the preceding week by Brinks, a secure logistics service provider for the gem and jewellery value chain. All costs will be borne by the owner of the stone and not the NGJA.
“This sapphire has been tested in the world-renowned Gübelin Gem Lab in Switzerland, from where it will be transported to Dubai to be auctioned. As far as I’m aware, the sapphire has been handed over to Brinks and it has obtained the necessary insurance. It is currently stored securely at its warehouse and will likely be couriered to Dubai within this week. The owner has told me that the auctioneer had asked for three months, ending in January 2023, to sell the sapphire cluster,” Weerasinghe explained.
Addressing the possible tax revenue to the Government from the sale of this stone, he revealed that when the sapphire was eventually sold, 1% would have to be paid to the NGJA as tax.
“When a gem is taken out of the country for testing purposes, the maximum we can charge is a nominal amount of Rs. 1,000. However, they must bring the gem to the country within 120 days. If they sell it, we will charge a tax of 1% on the price of the auction. When this sapphire cluster was taken out of the country it was valued at $ 1 million. Since the initial 120-day period expired, I granted the owner a further extension of six months, which will expire on 27 November 2022.
“Currently, there are no plans to extend it further. In such an event, the owner has agreed to pay us the tax of 1% on the $ 1 million valuation out of his own pocket. If we were to grant him a further extension of two months until January 2023, the NGJA will be able to charge a larger tax on the amount the stone will be sold for at the auction, which will definitely be significantly higher than the $ 1 million valuation. However, our auditors are not in favour of granting a further extension.”
Weerasinghe further revealed that the owner expected the sapphire cluster to be sold for around $ 30-40 million based on offers he had already received and that 40% of the auction price would have to be paid to the auctioneer.
OSL take:
The auction of Sri Lanka’s Serendipity Sapphire is a much looked forward to even in the international gem and jewellery market. The Serendipity Sapphire has also put Sri Lanka’s gem industry in the spotlight once again. The island has been renowned for its gems through the years with Ceylon Gems also being prominently featured in Royal jewellery in several Royal Houses. Local gem and jewellery authorities are once again focused on placing Sri Lanka among the highest gem and jewellery producers in the world. Sri Lanka’s many trade agreements and trade concessions have also helped boost the export of local gems and jewellery. Sri Lankan authorities have also introduced incentives and other programmes to further boost the industry while attracting foreign businesses/investors to the industry. Given the growth and business potential in Sri Lanka’s gem and jewellery industry, foreign businesses/investors could explore the growing opportunities in the industry.
| Article Code : | VBS/AT/26102022/X_2 |