Billionaire diamond magnate Steinmetz under house arrest for Guinea bribery probe

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Steinmetz is alleged to have paid tens of millions of dollars to senior public officials in Guinea to advance his businesses

Israeli authorities placed billionaire businessman Beny Steinmetz under house arrest on Monday over allegations of bribery and corruption in Africa linked to his mining company, BSG Resources (BSGR).

Steinmetz, along with other Israelis living abroad, is alleged to have paid tens of millions of dollars to senior public officials in Guinea to advance their businesses, a police spokesman said in a statement.

The 60-year-old was detained earlier in the day for questioning and will remain under house arrest until January 2.

BSGR said in a statement the allegations were baseless and Yuval Sasson, a lawyer for Steinmetz and BSGR in Israel, said the proceedings were “a recycling of an old process led by the government of Guinea…in order to illegally expropriate BSGR’s mining rights”.

“These are continuous and baseless attempts meant to conceal the corruption aimed at illegally expropriating assets,” Sasson said in a statement.

BSGR said in a separate statement that the investigations were initiated by the government of Guinea with international police organisations in the United States, Britain and Switzerland.

The Guinean government said Steinmetz’s detention was linked to an investigation it had started in 2011. The inquiry could implicate many people, but Guinea was not ready to make an extradition request, a senior government source said.

BSGR described Steinmetz as an adviser to the company, which is headquartered in the Channel Islands and is a mining arm of Steinmetz’s business conglomerate.

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A BSGR spokesman told Reuters that Steinmetz does not sit on BSGR’s board or have an executive role, but “is the beneficiary of the foundation which owns BSG Resources”.

As part of international efforts to improve transparency, the Guinean government under President Alpha Conde, elected in 2010, launched a review of mining contracts signed before 2011.

Within its review the West African nation investigated how BSGR obtained the rights to the Simandou deposit, the world’s largest untapped iron ore reserves, in 2008.

Anglo-Australian mining group Rio Tinto and BSGR have made legal claims against each other over the mining rights in Simandou.

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Last week, Guinea’s former minister of mines, Mahmoud Thiam, was arrested in New York on charges he was involved in bribery payments linked to Guinea’s mining industry.

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