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Arrested On Suspicion Of Bribery In Africa: Israeli Billionaire, Former Official, Others Implicated

Arrested On Suspicion Of Bribery In Africa: Israeli Billionaire, Former Official, Others Implicated

In a bribery investigation that could implicate many people, Israeli police have arrested mining billionaire Beny Steinmetz and his business associate, Asher Avidan, a former employee of Israel’s Ministry of Foreign Affairs.

The arrests are part of a widening inquiry into allegations of bribery and corruption in Africa, Reuters reported.

Israeli billionaire businessman Steinmetz owns a mining company that won — and then was stripped of — mining rights in Guinea. Steinmetz is suspected of bribing officials in Guinea and of money laundering. Steinmetz’s home and offices were raided Monday, police said, according to Israeli newspaper HaAretz. Steinmetz was ordered under house arrest for two weeks by an Israeli court.

Steinmetz’s Israeli and French passports were confiscated and bail set at $26 million. He paid bail, according to Wall Street Journal. Avidan also has Israeli and French passports. Steinmetz has not been charged.

The Republic of Guinea confirmed Monday that Steinmetz’s arrest was linked to a corruption investigation started in 2011, HaAretz reported. The government said it was not ready to ask for extradition but its investigation could implicate many people, according to Saadou Nimaga, secretary general of Guinea’s Ministry of Mines, Reuters reported.

Steinmetz and other Israelis are suspected of paying tens of millions in bribes to officials in Conakry, capital of Guinea, in return for their help in advancing local business interests, HaAretz reported:

The investigation is being conducted together with law enforcement officials from the U.S., Switzerland and Guinea, as part of a global push led by the OECD to address official corruption in member states. In Israel, the police’s fraud squad is working with state prosecutors and local tax officials.

The probe was made public Monday after a covert investigation found evidence supporting the suspicions, police said. Others are expected to be called in for questioning as the investigation continues.

The OECD (Organisation for Economic Co-operation and Development) is a Paris-based intergovernmental economic organisation with 35 member countries. There are no African member countries.

Steinmetz’s mining company, BSG Resources Ltd., was charged last week in U.S. federal court with laundering money from bribes in a separate mining case, Wall Street Journal reported.

When Guinean President Alpha Condé was elected in 2010, his administration launched a review of mining contracts signed before 2011 as part of international efforts to improve transparency.

Part of the review was an investigation of how BSGR obtained the rights to the Simandou deposit, the world’s largest untapped iron ore reserves, in 2008, Reuters reported.

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

Steinmetz outmaneuvered Rio Tinto in 2008, Wall Street Journal reported:

In 2014, the Guinea government stripped BSGR of its rights to Simandou and accused people connected to the company of paying bribes to a previous regime. It was a major blow for Mr. Steinmetz, who was trying to expand beyond the business that made his fortune—selling African diamonds, including to his biggest client, Tiffany & Co.

In November, Rio Tinto fired two top executives, saying they were involved in a $10.5 million payment made to a close connection of Condé. A former Guinean mining minister was charged last week in U.S. federal court with laundering money from bribes in a separate mining case. Rio Tinto said he colluded with Steinmetz’s mining company, BSGR.

BSGR said in a statement that the allegations were baseless. Steinmetz’s arrest was “in the aftermath of ongoing and what BSGR believes to be obsolete investigations surrounding bribery and corruption against BSGR,” HaAretz reported.

Steinmetz attorney, Yuval Sasson, said, “The current process is a recycling of an old process led by the Guinean government since its corrupt President Alpha Condé rose to power, with the aim of illegally confiscating BSGR’s mining rights.

“There have been continuous and baseless attempts aimed at camouflaging acts of corruption with the aim of illegal confiscation of assets,” Sasson said.

Steinmetz is “strong and more determined than ever to prove his innocence,” Sasson said Tuesday in an interview with Israel’s Army Radio, according to Reuters.