Israeli tycoon and one of the world’s richest men Beny Steinmetz was arrested in Israel on Monday on charges of offering bribes to secure iron ore rights for his mining company, BSGR, which has a strong presence in Guinea. According to the Guardian, Steinmetz allegedly paid millions of dollars in bribes so that his firm could be awarded half the rights to a rich iron ore deposit in the West African country. He is also being accused of money laundering.
Police raided his home and offices and arrested the billionaire, and he was later arraigned in court and released on house arrest for two weeks. His passports were also confiscated to make sure that he’s unable to leave the country.
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According to Israeli police, Steinmetz and his business partners obtained a tender to extract iron ore after paying tens of millions of dollars in bribes to senior government officials in Guinea.
Steinmetz claims that his company won the tender in return for a promise to fund an exploration program in the Simandou area in the rural parts of the country in 2008.
Since then, the deal has been investigated by the FBI, with a grand jury looking into allegations that the country’s Foreign Corrupt Practices Act may have been contravened.
“The investigation is being carried out in cooperation with law enforcement authorities in the United States, Switzerland, Guinea, and Israel, as part of an international effort led by the OECD against the bribing of public officials worldwide,” Israeli police said in a statement.
In 2013, one of Steinmetz’s representatives at BSGR, Frederic Cilins, was arrested and subsequently jailed for two years after he admitted to attempting to obstruct a criminal investigation.
It is reported that Cilins was recorded by the FBI attempting to persuade the wife of the late former Guinea President Lansana Conte to destroy documents that allegedly showed how BSGR gave bribes to government officials.
Guinea’s former Minister of Mining Mahmoud Thiam is also in police custody after he was arrested last week in New York for allegedly being involved in the bribery scandal.
BSGR issued a statement Monday confirming the arrest of Steinmetz, and dismissed the bribery allegations as “baseless.”
The company was stripped of its right to extract ore in Simandou after it was revealed that those rights were acquired through corrupt means.
The Simandou mining site is estimated to carry 2 billion tons of the highest quality ore in the world and it’s one of the largest and most profitable mining operations in the world.
Recent studies show that Simandou’s reserves are worth more than $11 billion and their utilization could bring immense benefits to the impoverished West Africannation.
Guinea ranks 178th out of 187 of the world’s poorest nations as indexed by the United Nations Development Program and more than half of its population lives below the poverty line.
