Israeli Billionaire Appeals Bribery Conviction in Switzerland
An Israeli mining billionaire begins on Monday an appeal against a landmark foreign bribery conviction handed down in Geneva early last year.
convicted of bribery and forgery over his company’s acquisition of mining rights in the West African nation of Guinea in the late 2000s.Beny Steinmetz, 66, was
A Swiss judge found that Steinmetz’s company BSG Resources Limited (BSGR) paid millions of dollars in bribes to the wife of Guinea’s former president to gain access to the world’s richest untapped deposits of iron ore in Guinea’s remote Simandou mountain range.
Some of the funds passed through private bank accounts in Switzerland, where Steinmetz was a tax resident.
The mining billionaire was sentenced to five years in prison and ordered to pay 50 million francs ($56 million). Frederic Cilins, 59, a French national who participated in the scheme, was sentenced to three-and-a-half years. Sandra Merloni-Horemans, 52, a Belgian national who administered hundreds of companies in Steinmetz’s corporate group, received a two-year suspended sentence.
Mark Pieth, Professor Emeritus at the University of Basel and President of the Swiss anti-corruption group Basel Institute of Governance, described as “spectacular” Steinmetz’s guilty verdict in January last year.
“There have been quite a few settlements in Switzerland for foreign bribery, but very few cases of actual convictions by a court. It is certainly the most spectacular one.”
Steinmetz will do anything to defend himself because he “realizes, if he loses the battle at this moment, he’s done. He’s finished, he’s not only at risk of being extradited, he is no longer in business, he’s got a really bad reputation," Pieth explained.
BSGR won mining rights in 2008 under the presidency of Lansana Conté, who had ruled Guinea since seizing power in a military coup in 1984. After Conté’s death, an investigation carried out by the government of newly elected President Alpha Condé found BSGR had won the mining rights through corruption. Condé’s government revoked BSGR’s rights in 2014.
Steinmetz will be represented at appeal by Daniel Kinzer, partner at international law firm CMS.
The Israeli businessman has argued that Condé conspired with billionaire George Soros to dispossess BSGR of its mining rights. In a 15-page press statement issued before the appeal, representatives of Steinmetz claimed that Condé demanded $1.25 billion from BSGR and its business partner for the right to remain in the country, accusing Condé of attempted “state blackmail”.
The statement said NGOs funded by Soros ensured “rumors and suspicions” about BSGR appeared in major international media, and described Soros as Steinmetz’s “personal enemy.”
At trial last year, Steinmetz argued he was not involved in the management of BSGR, which stands for Beny Steinmetz Group Resources, and was unaware of emails and money transfers which prosecutors said evidenced bribery.
But a Swiss judge found Steinmetz to be the group’s “effective head” and accepted the prosecution’s argument that Steinmetz masterminded a “corruption pact.”
If the guilty verdict is upheld at appeal, Steinmetz will have the opportunity to appeal again to Switzerland’s Supreme Court. According to Pieth, Steinmetz is expected to be allowed to leave Switzerland pending another possible lengthy appeal. “This will take a long time. They will probably not keep him in custody.”
Pieth said he was confident Steinmetz’s guilty verdict would act as a deterrent to others.
“Until now, people believed ‘if worst comes to worst, we’ll simply pay.’ Five years in prison, that’s a different matter,” Pieth told OCCRP.
A decision on the appeal is expected on September 7.
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