Today, a historic trial is starting in Calvin’s city. Israeli billionaire Beny Steinmetz faces charges of “corruption of foreign public officials” and “document forgery” with two business partners. He is alleged to have arranged the transfer of at least USD 8.5 million from 2006 to 2012 to get his hands on the Simandou iron-ore deposit in the Republic of Guinea. Switzerland must take preventive action so that it will no longer be complicit in predatory practices that deprive the populations of resource-rich countries of essential revenues.
Mining magnate Beny Steinmetz will finally have to respond to the charges against him in court, seven years after the case was opened. According to Geneva’s public prosecutor, from 2005 onwards, the businessman engaged in a “corrupt pact” with former president of Guinea Lansana Conté, who was in power from 1984 to 2008, and his fourth wife Mamadie Touré. At least USD 8.5 million were transferred to Touré – partly through Swiss bank accounts. The aim was to oust a competitor (Rio Tinto) and guarantee that Beny Steinmetz Group Resources (BSGR) would obtain the concessions for one of the largest reserves of iron-ore in the world, the Simandou mine, in 2008. The “deal of the century” (Sunday Times) ensured BSGR a profit totalling approximately twice the size of the Guinea state budget at the time*.
Beny Steinmetz used opaque structures to hide these allegedly corrupt schemes. These were notably orchestrated from Geneva, via a consulting company called Onyx Financial Advisors, whose former director is also in the dock. For her “assistance”, Touré was not paid directly by BSGR, but by a seemingly independent company called Pentler Holding Ltd, domiciled in the British Virgin Islands. In reality, however, Pentler is managed by BSRG via a network of offshore structures. Back in 2013, Public Eye had already mapped the complex web [2] spun by Beny Steinmetz from Geneva, where he resided until 2016. The businessman has always denied the corruption accusations and his lawyer Marc Bonnant will plead not guilty.
The affair demonstrates how tax havens can be used to conceal questionable – or even illegal – activities in countries with weak governance and regulation. It also calls into question the problematic role played by advisors and lawyers as service providers in creating or managing offshore companies and trusts while hiding behind professional secrecy. It is telling that, since 2003, the Financial Action Task Force has been asking its member states to subject designated ‘non-financial’ activities to the Money Laundering Law. To put an end to such scandals, Swiss legislation needs to cover acts linked to the creation, management or administration of companies or trusts. It is also vital that data on the true or beneficial owners of companies are published in Swiss company registers.
FOR MORE INFORMATION, PLEASE CONTACT: Oliver Classen, Media Director, +41 44 277 79 06, oliver.classen@publiceye.ch [3] Agathe Duparc, Senior Researcher (present at the hearing), +33 7 71 22 34, agathe.duparc@publiceye.ch
CONTEXT
In 2011, Guinea’s first democratically elected president Alpha Condé initiated an audit of mining contracts awarded by his predecessors. This process actually brought to light the scandal. In 2008, BSGR had taken advantage of dictator Lansana Conté’s last hours of life to obtain the concession for blocks 1 and 2 of the iron-ore deposit at the Simandou mine. The company invested USD 165 million before, 18 months later, re-selling 51% of its shares to Brazilian firm Vale for USD 2.5 billion! A criminal investigation was opened in the United States in 2013. The FBI managed to get hold of damning documents and testimonies, which were covered in a fascinating report by US magazine The New Yorker [4].
PRESS RELEASE, Public Eye
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Zurich/Lausanne, 11.01.2021
PRESS RELEASE, Public Eye
Steinmetz trial: the largest corruption case in the mining sector goesto court in Geneva
Today, a historic trial is starting in Calvin’s city. Israelibillionaire Beny Steinmetz faces charges of “corruption of foreignpublic officials” and “document forgery” with two business partners. Heis alleged to have arranged the transfer of at least USD 8.5 millionfrom 2006 to 2012 to get his hands on the Simandou iron-ore deposit inthe Republic of Guinea. Switzerland must take preventive action so thatit will no longer be complicit in predatory practices that deprive thepopulations of resource-rich countries of essential revenues.
Mining magnate Beny Steinmetz will finally have to respond to thecharges against him in court, seven years after the case was opened.According to Geneva’s public prosecutor, from 2005 onwards, thebusinessman engaged in a “corrupt pact” with former president of GuineaLansana Conté, who was in power from 1984 to 2008, and his fourth wifeMamadie Touré. At least USD 8.5 million were transferred to Touré –partly through Swiss bank accounts. The aim was to oust a competitor(Rio Tinto) and guarantee that Beny Steinmetz Group Resources (BSGR)would obtain the concessions for one of the largest reserves of iron-orein the world, the Simandou mine, in 2008. The “deal of the century”(Sunday Times) ensured BSGR a profit totalling approximately twice thesize of the Guinea state budget at the time*.
Beny Steinmetz used opaque structures to hide these allegedly corruptschemes. These were notably orchestrated from Geneva, via a consultingcompany called Onyx Financial Advisors, whose former director is also inthe dock. For her “assistance”, Touré was not paid directly by BSGR,but by a seemingly independent company called Pentler Holding Ltd,domiciled in the British Virgin Islands. In reality, however, Pentler ismanaged by BSRG via a network of offshore structures. Back in 2013,Public Eye had already mapped the complex web [2] spun by Beny Steinmetzfrom Geneva, where he resided until 2016. The businessman has alwaysdenied the corruption accusations and his lawyer Marc Bonnant will pleadnot guilty.
The affair demonstrates how tax havens can be used to concealquestionable – or even illegal – activities in countries with weakgovernance and regulation. It also calls into question the problematicrole played by advisors and lawyers as service providers in creating ormanaging offshore companies and trusts while hiding behind professionalsecrecy. It is telling that, since 2003, the Financial Action Task Forcehas been asking its member states to subject designated‘non-financial’ activities to the Money Laundering Law. To put anend to such scandals, Swiss legislation needs to cover acts linked tothe creation, management or administration of companies or trusts. It isalso vital that data on the true or beneficial owners of companies arepublished in Swiss company registers.
FOR MORE INFORMATION, PLEASE CONTACT:
Oliver Classen, Media Director, +41 44 277 79 06,oliver.classen@publiceye.ch [3]Agathe Duparc, Senior Researcher (present at the hearing), +33 7 71 2234, agathe.duparc@publiceye.ch
_CONTEXT_In 2011, Guinea’s first democratically elected president Alpha Condéinitiated an audit of mining contracts awarded by his predecessors. Thisprocess actually brought to light the scandal. In 2008, BSGR had takenadvantage of dictator Lansana Conté’s last hours of life to obtainthe concession for blocks 1 and 2 of the iron-ore deposit at theSimandou mine. The company invested USD 165 million before, 18 monthslater, re-selling 51% of its shares to Brazilian firm Vale for USD 2.5billion! A criminal investigation was opened in the United States in2013. The FBI managed to get hold of damning documents and testimonies,which were covered in a fascinating report by US magazine The New Yorker[4].