BSG Resources Limited: Beny Steinmetz and BSG Resources sue FTI Consulting LLP and Lord Malloch-Brown

  BSG Resources Limited: Beny Steinmetz and BSG Resources sue FTI Consulting
  LLP and Lord Malloch-Brown

Business Wire

ST PETER PORT, Guernsey -- April 11, 2013

BSG Resources Limited (“BSGR” or “the Group”) and Mr Beny Steinmetz announce
that they have issued and served legal proceedings, jointly, in the UK High
Court, against FTI Consulting LLP (“FTI”), the London office of the business
advisory firm and BSGR’s former professional adviser, and against Lord
Malloch-Brown, previously known as Mark Malloch-Brown, former United Nations
Deputy Secretary-General and Chairman of FTI for Europe, Middle East and
Africa (“EMEA”). FTI had been appointed by BSGR to act as its PR adviser in
May 2009.

The Claim is made against FTI for breach of fiduciary duty and for breach of
contract; against Lord Malloch-Brown for breach of tortious duty of
confidence, for procuring and/or inducing breach of contract, and for
defamation; and jointly against both FTI and Lord Malloch-Brown for conspiracy
to withhold disclosure of a conflict of interest from BSGR; all occurring
between 2009 and 2012.

The Claim sets out in detail that FTI and Lord Malloch-Brown acted unlawfully,
acted against the best interests of BSGR and, in the case of Lord
Malloch-Brown, had numerous opposing interests, in particular regarding his
relationship with Mr George Soros and his NGOs, some of which were (and are)
engaged in a smear campaign against BSGR.

The Claimants believe that at a time when Lord Malloch-Brown’s firm (FTI) was
engaged as a key adviser on reputational and other matters, he was behaving in
a collusive and unlawful manner with Mr Soros and providing confidential
information to Mr Soros. This culminated in Lord Malloch-Brown, under pressure
from Mr Soros, procuring FTI's resignation from its account with BSGR in
November 2012.

The information about the misuse of confidential information by FTI and Lord
Malloch-Brown was obtained through use of the Data Protection Act 1998 and is
based on FTI’s own electronic records. The Claimants consider Lord
Malloch-Brown’s activities especially shocking as he was previously a Minister
of State in the UK Government and a Deputy Secretary-General of the United


BSGR is a leading international mining and natural resources company (see
below). BSGR has been an active investor in Guinea since 2006, with
exploration projects in iron ore, bauxite and uranium, including the discovery
of the Zogota iron ore deposit. In December 2008, BSGR was awarded an
exploration license covering Blocks 1 and 2 of the remote Simandou region in
the south east of Guinea. BSGR invested over $160 million of its capital, on
both Zogota and Blocks 1 & 2, without any certainty of success.

In March 2010, following negotiations with the Government of Guinea (“GoG”), a
Concession Agreement was signed which provided for a two-phased project
comprising of the Zogota and Simandou Blocks 1 & 2 iron ore deposits. The
Concession Agreement, which is published online, adheres to international
mining best practices and committed the parties to an export route through
neighbouring Liberia. The BSGR feasibility study demonstrated that this world
class project would require a multi-billion dollar investment programme which
would include the construction of a railroad through Liberia and a deep water
port. In 2010, BSGR entered into an agreement with Vale SA of Brazil, one of
the world’s largest mining companies, which bought a share in the project and
created a new joint-venture company, VBG which subsequently committed to
invest over $10 billion on the project.

In December 2010, Mr Alpha Conde became President of Guinea after a disputed
election. He has since then failed to hold promised parliamentary elections
and the country is in turmoil. Mr Conde, who is advised by Mr Soros and Soros
entities, has taken positions on resource nationalism and contract reviews
which have unfortunately stopped all large mining development projects in the
country, including the VBG project.

Organisations linked to and funded by Mr Soros have issued entirely baseless
smears against BSGR in a bid to justify the bizarre cessation to mining
investments in Guinea.

The effect has been to suspend projects which would have created employment to
thousands in Guinea and to massively damage the prospects for the Guinean
economy and international investment.


The Claim against FTI and Lord Malloch-Brown states that:

  *FTI was appointed by BSGR to act as its PR adviser in May 2009;
  *A very serious conflict of interest existed within FTI from September
    2010, when Lord Malloch-Brown joined as Chairman EMEA, and that this
    conflict was deliberately withheld from BSGR which was a fee-paying client
    of FTI;
  *Lord Malloch-Brown had (and still has) a close business and personal
    relationship with Mr Soros and the NGOs funded by him, who were the
    parties engaged in a smear campaign against BSGR. Indeed, Lord
    Malloch-Brown was involved in funding those very same NGOs;
  *Lord Malloch-Brown provided Mr Soros, the NGOs funded by Mr Soros, and
    journalists with information confidential to BSGR and FTI;
  *During the existence of a contract between BSGR and FTI, Lord
    Malloch-Brown was disseminating completely untrue, defamatory and highly
    prejudicial allegations regarding BSGR, despite the fact that he and FTI
    were bound to act in BSGR’s best interests;
  *In November 2012, Lord Malloch-Brown, himself under pressure from Mr
    Soros, procured FTI's resignation from its account with BSGR without
  *The contract between BSGR and FTI was terminated because Mr Soros had
    exerted pressure on Lord Malloch-Brown to do so, including by making
    further highly defamatory and untrue allegations, and against the wishes
    of the FTI account team;
  *The timing of the termination was designed to create an entirely false
    impression that FTI had legitimate concerns about the business practices
    of BSGR. In fact, termination was solely to facilitate Mr Soros who
    applied pressure on Lord Malloch-Brown.

Mishcon de Reya is acting as legal adviser to the Claimants.

A copy of the Particulars of Claim can be found on the link below:

Dag Cramer, CEO of Onyx Financial Advisors UK, said on behalf of BSGR:

“The launch of legal proceedings underlines our determination to undo the
significant damage to our client, BSGR and Beny Steinmetz resulting from the
actions of Lord Malloch-Brown and FTI. Whilst purporting to be acting in our
best interests, Lord Malloch-Brown was in fact serving to cause us enormous
damage by facilitating George Soros and his NGOs which, we believe facilitated
a campaign of smears and innuendoes.

“These actions were unlawful. They severely damaged our position with the
Government of Guinea, which is being advised by George Soros and his NGOs and
which has been attempting to renege on its contractual obligations in respect
of BSGR’s interests in Guinea.”

About Beny Steinmetz

Beny Steinmetz, aged 57, is a Swiss resident with dual Israel-French
nationality. He started his career in the family diamond business. Steinmetz
Diamonds provides rough and polished diamonds to customers around the world
and has manufacturing facilities in Botswana, South Africa, Namibia and New
York. The Steinmetz family interests have extended into mining, oil, gas,
power generation, real estate and financial investments. Beny and his
immediate family are among the beneficiaries of trusts which own the Steinmetz
business group (BSG).

Beny Steinmetz is the Chairman of the Agnes & Beny Steinmetz Foundation which
specialises in and supports education and welfare, particularly in early
years, in Israel and internationally. It has contributed to reducing poverty
and supporting education and inclusion through the development of schools,
sports facilities and environmental uplift programs for local communities. The
Foundation also supports art and artists and Beny is on the Board of the Tel
Aviv Museum of Art. Beny holds an honorary degree of Dr Honoris Causa from the
Netanya Academic College.

About BSGR

BSG is a privately owned holding company with interests across the globe in
natural resources, real estate, capital markets and the diamond industry.

BSGR, BSG’s natural resources company, is an international diversified mining
company with operations in fourteen countries across metals and mining
operations in Africa and Eastern Europe, including ferro-nickel, diamonds,
copper, iron ore and gold. The group is also active in the
production/exploration of oil and gas and engineering, and in power generation
in Nigeria. BSGR has a fifteen-year track record of providing risk capital for
developing and executing mining operations in challenging environments. BSGR
employs over eight thousand people and has created value and prosperity for
its African stakeholders in South Africa, Botswana, Tanzania, Nigeria, Sierra
Leone, the Democratic Republic of Congo, and Guinea.

In all of these countries BSGR has operated in a fully transparent manner,
working hand in hand with host governments at both the national and local
level. BSGR takes pride in its ability to forge strong relationships with
local communities and stakeholders in areas benefiting from its operations.

About BSGR’s interests in Guinea

In December 2008, following a three-year exploration programme in which BSGR
invested over $165 million, the Group concluded a Basic Agreement with the
Republic of Guinea which provided the framework to the development of a
world-class integrated mining project at Zogota and Simandou Blocks 1 and 2.
In April 2010, in order to bring in a world-class partner who could support
bringing the assets into production, BSGR approved a strategic sale of 51% to
Vale, forming a Joint Venture known as VBG.

Despite many years of political instability, including the ongoing and
unexplained delays to legislative elections, and continued changes to the
Guinean Mining Code and fiscal regime, VBG has made considerable progress at
Zogota and Simandou Blocks 1 and 2. Over $600 million has already been
invested by VBG in Guinea and, in accordance with agreed timetables, the
feasibility study for Blocks 1 and 2 were submitted in September 2011 with
commercial production due to begin at Zogota by end 2012.

Progress has been halted because the Guinean government stopped its engagement
with VBG claiming that it has no agreements with Vale and refusing to
recognise the official sale of rights to Vale and the name change to VBG. This
is despite all licenses and titles being duly legalised with the Guinean
Register of Commerce and formally notified to the Guinean Minister of Mines
and Director of Centre for Promotion and Development; duly acknowledged and
with letters sent to VBG under its new name. Furthermore, many members of the
current Government of Guinea, including the current Minister of Mines who
served as the Prime Ministerial advisor on mining issues through the award of
licenses to BSGR, have publically approved the VBG Joint Venture.


Media Enquiries re. BSG Resources
Powerscourt +44(0)-20-7250-1446
Rory Godson / Ian Middleton / Conal Walsh
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