Israeli diamond tycoon Beny Steinmetz has denied charges made by Swiss prosecutors that he bribed Guinean officials to win lucrative mining licences in the west African country.
Mr Steinmetz and two associates are alleged to have paid $10m to one of the wives of Lansana Conté, the former president of Guinea, in order to secure rights to one of the world’s largest untapped reserves of iron ore, partially through Swiss bank accounts. Prosecutors are seeking prison terms of two to 10 years for the three.
The Israeli billionaire has been enmeshed in legal battles around the globe stemming from allegations that his business orchestrated a bribery scheme to win the prized mining prospect, a source of the key ingredient needed to make steel.
In an indictment filed with Geneva’s criminal court, a prosecutor accused Mr Steinmetz of “bribing foreign officials and forgery” in Guinea between 2005-2010 while operating his business from Geneva.
Claudio Mascotto, the Geneva prosecutor, said he had been investigating the case since 2013. The bribery allegations were first revealed in the Financial Times in 2012.
Mr Steinmetz paid “bribes to one of the wives of former Guinean president Lansana Conté with a view to ousting a competitor and granting Beny Steinmetz Group Resources [BSGR] mining rights in the region of Simandou,” the prosecutor’s office said in a statement.
The bribes were hidden using forged documents and “false invoices”, according to the indictment.
Marc Bonnant, Mr Steinmetz’s Geneva-based lawyer, said the charges were baseless.
“Beny Steinmetz denies categorically any wrongdoings,” he told the FT. “He never paid a single cent to any president in Guinea or to any public agent in Guinea, neither did he ever give instructions for such monies to be paid.”
Mr Steinmetz now lives in Israel, but returned to be questioned by prosecutors and attended every hearing over the past six years, Mr Bonnant said. The billionaire will attend the trial, he added.
Mr Steinmetz has long denied wrongdoing in his dealings in Guinea, which have been the subject of a series of corruption probes in Guinea, the US, Switzerland and Israel, where he was detained and questioned by police in 2016.
Earlier this year, Mr Steinmetz reached a settlement with Guinean authorities over the rights to portions of the giant Simandou project in which both parties agreed to “waive all outstanding procedures”.
The Guinean government also granted another mining license to a group in which Mr Steinmetz is an investor.
“Not only do the Guinean authorities recognise today that there has never been corruption, but they give back [another mining license] to the alleged corruptor,” Mr Bonnant said.
The deal in February brought an end to a saga that began in 2008 when Mr Conté stripped Anglo-Australian miner Rio Tinto of its license for the northern half of the deposit. Days before he died later that year, Mr Conté granted the same rights to BSGR, a mining arm of Mr Steinmetz’s business empire.
His successor, Alpha Condé, later launched an inquiry into the deal and concluded the rights had been won through bribery. He cancelled BSGR’s claims on Simandou and Zogota, another large deposit, though the company denied any wrongdoing and fought the decision through international arbitration.
Under the February deal, BSGR relinquished its rights to blocks 1 and 2 of the project, and Guinea asked a group of investors, including Mr Steinmetz and former Xstrata boss Mick Davis, to develop Zogota.
BSGR said: “The indictment announced by the Swiss prosecutor’s office is as misjudged as it is absurd in view of the dropping of all claims against BSG Resources and Beny Steinmetz by the Guinean government.”
Last year BSGR was placed into administration in the face of the legal battles swirling around its dispute with Guinea.
BSGR was ordered to pay iron ore producer Vale $1.25bn after it was found liable for fraudulent misrepresentations, including a bribery scheme, by a London arbitration court.
Details of the award, made in April, emerged in the US where Vale is seeking a court order to enforce the decision, which relates to an ill-fated joint venture in Guinea.
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