Financial Crime World

Business Tycoon Beny Steinmetz Sentenced to Five Years in Prison for Bribing Guinean Officials in landmark Corruption Case

This article sheds light on the largest corruption case in the mining sector, as Israeli businessman Beny Steinmetz was handed a five-year prison sentence by a Swiss court for bribing Guinean public officials to obtain mining rights for Guinea’s valuable iron ore deposits.

The Trial: A Battle for Africa’s Natural Resources

The high-profile trial brought to light the often opaque fight for control of Africa’s natural resources. Beny Steinmetz, a former diamond magnate and French citizen, was found guilty of offering bribes to secure mining rights for the Simandou mines, which are believed to contain some of the world’s most valuable untapped iron ore deposits.

The Verdict

Chief Justice Alexandra Banna declared that the mining rights had been illegally acquired and stated that Steinmetz had cooperated with others in the process. The court also ordered him to pay a compensation of 50 million Swiss francs (£41 million; $56 million) to the state of Geneva.

Steinmetz, who consistently denies the allegations, condemned the ruling as a “big injustice” and intends to appeal.

Background

  • Case dates back to 2006 when Steinmetz’s company Beny Steinmetz Resources Group (BSGR) allegedly paid bribes to secure mining rights from Rio Tinto
  • Investigations involve Switzerland due to Steinmetz’s previous residency and business activities

Key Figures

  • Both sides in the trial represented by high-profile legal figures from Geneva
  • Defense lawyer Marc Bonnant argues Steinmetz never paid any money to Ms. Touré, and she did not qualify as a public official under Swiss law
  • Co-defendants received prison sentences for paying $8.5 million in bribes to the late Guinean president Lansana Conté’s fourth wife, Mamadie Touré

The Alleged Corruption

The prosecution presented evidence suggesting that bribes reached far beyond Guinea, extending to Switzerland, Liechtenstein, the Virgin Islands, and back again. Chief Prosecutor Yves Bertossa confronted Beny Steinmetz, questioning his knowledge of the financial transactions.

Steinmetz has a history of financial investigations, including being questioned by Israeli authorities and being convicted of money laundering in absentia in Romania.

Significance and Repercussions

  • Draws attention to the significance for the mining industry and Switzerland’s efforts to clean up financial sector
  • The case highlighted the need to address Switzerland’s legal loopholes enabling such practices
  • Swiss government introduces new legislation requiring businesses to report on human rights and environmental standards and conduct due diligence
  • The Swiss Attorney General is currently investigating other major financial scandals

The Broader Implications

When BSGR acquired the Simandou mining rights, they did not extract any iron ore – leaving businesses and their shareholders with significant profits at the expense of the Guinean population. The valuable iron ore deposits remain untouched, and the Simandou region lacks investment. This situation is common in Africa, where unscrupulous businesses exploit the fight for control of mineral resources with little oversight. The bribery in Guinea only came to light after the death of President Lansana Conté, highlighting the need for greater transparency and oversight in these matters.