Swiss Criminal Court Convicts Beny Steinmetz

A Swiss criminal court convicted Israeli businessman Beny Steinmetz of bribery and forgery in connection with his company BSG Resources Ltd.’s (BSGR) procurement of valuable mining rights in Simandou, Guinea. Two Steinmetz’s associates were also found guilty, one of bribery and forgery and the other of bribery. The court sentenced Steinmetz to five years of prison and ordered him to pay CHF 50 million (US$56 million).

Steinmetz was accused of paying or arranging bribes to officials to obtain exploration permits for mining an ironore deposit in the Simandou area.

Back in April 2019, the London Court of International Arbitration found that BSGR defrauded Vale, its former partner in the project, by concealing its bribery and corruption from Vale to secure the company’s investment in Simandou. That court awarded Vale more than US$2 billion in damages. The award arose out of alleged fraud and breach of representations and warranties committed by BSGR to persuade Vale to purchase a 51% interest in concessions held by BSGR to develop an iron ore deposit in Simandou and the adjacent Zogota concession. Vale paid BSGR an initial price of US$500 million, and invested more than US$700 million, principally in Zogota, before the Guinean government withdrew the concessions when it found that BSGR obtained its rights to Simandou as a result of bribery of Guinean officials.

Vale said it will continue to pursue collection from BSGR and Steinmetz personally, including through litigation in the High Court in London, which has entered a worldwide freezing order on the assets of Steinmetz, his foundation and other defendants. Steinmetz said he will appeal the verdict.

As featured in Womp 2021 Vol 02 -