Africa
Mining company collapses amid corruption claims
By Robin Pagnamenta, Times (UK), March 7 2018
Mar 8, 2018 - 1:01:38 PM

Beny Steinmetz’s holding company for his international mining business, BSG Resources, has been placed in administration

A mining company controlled by Beny Steinmetz, the Israeli diamond tycoon, was placed in administration yesterday amid an escalating legal dispute over allegations that it engaged in bribery linked with a mining project in west Africa.

BSG Resources Ltd, a Guernsey-based holding company of Mr Steinmetz’s international mining business, which is involved in mining and refining iron ore, diamonds and nickel, was placed in administration by a court on the Channel island, according to BDO, the accountancy firm.

The move comes as BSGR faces separate court actions in Paris and New York over its links to a corruption scandal involving rights to a huge mining project at Simandou in Guinea, the world’s biggest untapped iron ore deposit.

A spokesman for BSGR declined to comment.

The move is thought to be part of an effort to shield the company and its owners from some of the legal actions directed against it.

BSGR was granted rights to half the project by Lansana Conté, Guinea’s former ruler, days after he had repossessed the project from Rio Tinto in 2008 and shortly before his death. It was dubbed the “deal of the century” later because BSGR obtained the concession in return for a pledge to invest $165 million in an exploration programme in the Simandou region. Eighteen months later it sold a share in it to Vale, of Brazil, for $2.5 billion.

In 2014 a special committee in Guinea found that BSGR had acquired Simandou corruptly and withdrew its rights, claiming that it had paid millions of dollars in bribes to secure the concession. BSGR and Mr Steinmetz have consistently denied wrongdoing and claim that the accusations were fabricated.

The affair has been under investigation in Guinea, Switzerland and the United States. A tribunal in Paris is set to consider the allegations this spring, while a legal action is under way in New York, pitting Mr Steinmetz against George Soros, the billionaire investor. Mr Steinmetz has accused Mr Soros of a smear campaign based on untrue allegations. Mr Soros denies the smear allegations.

Mr Soros’s Open Society Foundations is a financial backer of Global Witness, a non-governmental organisation that has campaigned to investigate allegations of bribery over the Simandou deposit.

Mr Steinmetz has been restricted in his ability to travel in recent months by a separate court action in Israel.

A spokesman for BDO said that several subsidiary companies of BSGR were not subject to the insolvency process and would trade as usual.