Beny Steinmetz’ mining company, BSGR, paid millions in bribes to the wife of Guinea’s former dictator to secure the rights to operate an iron mine in the West African country, a US arbitration ruling has said.
The diamond magnate’s firm used “corrupt practices” to obtain licenses to mine Guinea’s Simandou iron ore deposit, the International Centre for the Settlement of Investment Disputes (ICSID) said.
Steinmetz’s Geurnsey headquartered company used a network of shell companies to pay at least $9.4m (£7.5m) in bribes to Mamadie Touré – one of former Guinean dictator Lansana Conté’s four wives – to win a license to run the iron ore mine.
The diamond dealer “went to extraordinary lengths to cover up” their corrupt efforts to secure Blocks 1 and 2 of the Simandou resource, with a view to making its payments untraceable, the ICSID said.
The ICSID’s rulings comes as Steinmetz, who was once the richest man in Israel, faces a flurry of lawsuits over his dealings in Guinea, stemming from the country’s ex-leader Lansana Conté’s decision to strip the mining giant Rio Tinto of its rights to develop the Simandou resource and award those rights BSGR.
Guinean president Alpha Condé later stripped BSGR of its mining rights in 2014, after a government inquiry said the diamond magnate’s firm had obtained its licenses through corruption.
In response Condé decision, BSGR later launched a claim against the democratically elected government though the ICSID, in a bid to regain control over the iron resource and win damages from Guinea.
In 2017, the firm also launched a lawsuit against billionaire financier George Soros over claims he manipulated Guinea’s government to strip BSGR of its licenses.
The ICSID’s decision comes after a Geneva court sentenced Steinmetz to five years in jail and fined him 50m Swiss francs (£41m) after convicting the French-Israeli national of bribery. Steinmetz has always denied bribery and he condemned that Geneva ruling as a “big injustice.” He has appealed that ruling, which will be heard in the summer of this year.
BSGR has been approached for comment.