Beny Steinmetz. Picture: REUTERS
Beny Steinmetz. Picture: REUTERS

Beny Steinmetz goes on trial facing bribery charges in Geneva on Monday in the latest chapter of a legal saga that’s dogged the Israeli businessman’s gamble on a multibillion-dollar mine.

Steinmetz and two businesspeople are accused of paying the wife of Guinea’s deceased former president, Lansana Conte, $8.5m to secure the concession rights to a vast mountain of iron ore in the country’s south. The trio are also accused of forgery for allegedly creating share structures to hide the bribes. The trial is taking place in Geneva as Steinmetz lived there until 2016 and had businesses there.

The trial is groundbreaking for Switzerland and Steinmetz, said David Muehlemann, a policy analyst at Swiss corporate governance watchdog Public Eye.

“It’s a big deal as one of the very few big corruption cases that has gone all the way to court in Switzerland and one of the first times a criminal court will rule on Steinmetz as an individual,” Muehlemann said.

Iron riches

The case is the latest piece in a more than decade-long dispute over one of the world’s richest mineral deposits. As surging Chinese demand spurred a commodity race in Africa, Steinmetz acquired the rights to the Simandou iron-ore project in Guinea in 2008. But the country’s new president seized back the asset after a corruption probe, triggering investigations elsewhere into companies Steinmetz controlled.

Steinmetz, a French and Israeli citizen, will come to Geneva for the trial, his legal team said. Mamadie Toure, Conte’s widow, is scheduled to testify on Wednesday, but it’s not clear whether she will attend, according to lawyers and court officials. Without her, Steinmetz’s lawyers said, a trial cannot be fair.

With Conte dead, Toure is a key witness, according to Camille Haab, one of Steinmetz’s lawyers. As the defence hasn’t been able to cross-examine her since the case began in 2013, “it is vital that we have the opportunity to do so during the trial”, Haab said.

The Geneva court president said in a statement that Toure has been summoned to appear on Wednesday, and declined to comment further. A New York lawyer who previously represented Toure declined to comment. Separate attempts to reach Toure were unsuccessful.

The trio of defendants organised bribes to secure the rights to the Simandou mine just weeks before Conte’s 2008 death, Swiss prosecutors allege. The concession’s previous owner, Rio Tinto, lost the rights after failing to develop the site.

A lawyer for one of Steinmetz’s co-defendants, a Belgian businesswoman who can’t be named under Swiss reporting conventions, declined to comment.

She ran Geneva-based Onyx Financial Advisors, which was responsible for the creation and oversight of most of the shell companies used in the mining project, Swiss prosecutors say. These include British Virgin Islands-based Pentler Holdings, which was one of the key vehicles for masking the bribes, according to their indictment.

New York case

The Frenchman on trial with Steinmetz is a former adviser to Steinmetz’s BSG Resources (BSGR) who was sentenced to two years in prison by a New York federal court in 2014 for obstructing a criminal probe linked to a bribery investigation in Guinea.

Jean-Marc Carnice, who represents the Frenchman, said his client’s US conviction was part of a plea bargain and has no bearing on the Swiss allegations against him. The man contests all allegations of bribery and forgery and Carnice said he will argue for his acquittal.

Steinmetz did nothing wrong, his lawyer Marc Bonnant said. He said that the Swiss indictment has serious flaws.

Though Toure is widely referred to as one of Conte’s wives, Bonnant said she was never married to Conte and thus can’t be considered a public official. Second, nine of the 10 alleged illicit payments were paid after Conte’s death, which undermines the charge of bribery, he said.

“How do you bribe a ghost?” Bonnant said.

Guinea’s mining minister and a government spokesperson didn’t respond to calls for comment.

Though Steinmetz struck a deal with the current Guinean government in 2020 to withdraw allegations of corruption against him, he faces other legal challenges.

Vale, a Brazilian mining giant and Steinmetz’s former partner in the Simandou project, was awarded $2bn in 2019 by a London arbitration that found that BSGR made fraudulent representations when it sold the stake to Vale. BSGR has said it will appeal the award to UK courts because it doesn’t believe it was treated fairly.

Vale reiterated that it was awarded $2bn by arbitrators, declining to comment further. A representative for BSGR didn’t respond to a message seeking comment.

Steinmetz has been seeking new evidence to overturn the arbitration ruling, using a private-intelligence firm run by former Israeli spies to try to prove Vale knew the deal was problematic before agreeing to it.

Steinmetz, who built his fortune as a diamond trader, has been the subject of investigations by authorities in the US, Switzerland, Romania and Israel, where he was briefly detained in 2016 and placed under house arrest. He has said that the investigations stem from a conspiracy to deprive his company of its rights to Simandou.

In December, Romania’s Supreme Court sentenced Steinmetz to five years in prison, overturning a lower court’s decision to acquit them in June 2019, reports say. The court ruled that Steinmetz and business partner Tal Silberstein colluded with a Romanian businessman and the grandson of the country’s former king in an attempt to defraud the state.

Bloomberg

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