Kimberley Diamonds is standing behind chairman Alexandre Alexander as he prepares to fight a legal battle over claims he misled investors.
Mr Alexander was arrested on Wednesday amid claims by the corporate watchdog that he authorised false and misleading statements about Kimberley's earnings forecasts issued to the stock market between October 2013 and March 2014.
The non-executive chairman denies the charges.
In a brief statement on Thursday, Kimberley said it was standing by Mr Alexander.
"The KDL board would like to confirm that Mr Alexander will remain as non-executive chairman of the company with its unanimous support," the statement said.
Mr Alexander was arrested after an investigation by the Australian Securities and Investments Commission.
The watchdog claims Kimberley failed to disclose that its earnings forecasts were based on assumptions it would obtain a 30 per cent price rise for its rare yellow diamonds.
Kimberley was forced in May 2014 to slash its earnings forecast after failing to secure higher prices during talks with a subsidiary of the famous US jeweller Tiffany & Co.
The price of Kimberley's shares plunged 41.5 per cent.
Mr Alexander has been charged with four offences under the Corporations Act.
Each charge carries a maximum penalty of five years jail or a $34,000 fine.
He is due to face Sydney's Downing Centre on November 10.
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