Mining billionaire detained in fraud probe
BENY STEINMETZ, the Israeli diamond mining magnate, was taken into custody by Israeli police yesterday on suspicion of fraud, obstruction of justice and bribery.
The 61-year-old billionaire, who is one of Israel’s wealthiest men, was detained alongside four other suspects as part of a joint international investigation by Israeli, Swiss and US authorities. Israeli police gave few details of the allegations but said the five men were suspected of creating fake contracts to move and launder money.
Detectives raided the men’s homes and offices and a judge granted police permission to detain Mr Steinmetz until Thursday for questioning. Mr Steinmetz, who founded the BSG Resources (BSGR) mining company, denies any wrongdoing.
Appearing before a magistrate’s court in central Israel, the businessman hit out at Israeli investigators and George Soros, the Hungarian-american investor with whom he has had a long-time rivalry.
“I feel terrible that the state of Israel is doing this to me. This is customary in totalitarian states. It’s like a dictatorship that decides and marks people,” Mr Steinmetz said.
“There is nothing, the whole investigation is nothing. There are those who have marked us here. It’s political. George Soros marked me. We did not do anything.” Mr Steinmetz has not been charged with a crime. A spokesman declined to comment.
Police said in a statement that the men were detained on suspicion of money laundering, fraud, forgery, obstruction of justice and bribery.
The police raids on Monday were the latest in a long string of legal troubles for Mr Steinmetz, who lives mainly in Geneva and has dual Israeli-french citizenship. Israeli police placed him under house arrest for two weeks in December 2016 on suspicion of bribing officials in the west African country of Guinea to advance BSGR’S business interests.
The house arrest was lifted in January and he was released without charge but on the conditions that he hand over a 100 million shekel (£21m) guarantee and not leave Israel for six months.
BSGR gained access to half of Guinea’s giant iron ore seam, known as Simandou, in 2008 after paying a small amount for the mining rights. It later sold half its concession to Brazilian mining giant Vale for $2.5bn (£2bn), although just $500m was paid.
Simandou is thought to be the world’s richest untapped deposit of iron ore, used in steel. The deposit had been wholly owned by FTSE 100 giant Rio Tinto until BSGR’S arrival.
The Guinean government stripped BSGR of its access in 2014 after
concluding that it had bribed its way to the rights. BSGR denies any wrongdoing and has threatened to file a lawsuit against Mr Soros, accusing him of orchestrating a defamation campaign against the company and encouraging Guinea to strip it of the Simandou rights. Mr Soros’s representatives have dismissed Mr Steinmetz’s claims as a “PR stunt”.
Asher Avidan, a former president of BSGR in Guinea, was taken into custody alongside Mr Steinmetz. Mr Avidan was also placed under house arrest and released in January.
Among the others detained were Tal Silberstein, a prominent Israeli political consultant, and David Granot, the acting chairman of Israeli telecoms giant Bezeq. Mr Silberstein had been doing polling work for Austria’s Social Democratic Party ahead of parliamentary elections in October but the party cut ties with him after learning of his detention in Israel. Bezeq said in a statement that Mr Granot’s detention was “not related to the company”.