Billionaire Steinmetz Recovers From Setback in Simandou Battle

  • Ex-executive takes stand after saying last week he wouldn’t
  • Questions focus on alleged bribes to former president’s wife

Israeli billionaire Beny Steinmetz recovered from a setback in a long-running legal battle over an iron-ore project in Guinea, when one of his employees defied the advice of lawyers and gave hours of testimony to a Paris arbitration court denying allegations of bribery.

Asher Avidan was the top official in Guinea for Steinmetz’s BSG Resources Ltd., which is accused of paying millions of dollars in bribes in 2008 to win the right to mine part of the West African country’s giant Simandou iron-ore deposit. Steinmetz’s company sought compensation at the World Bank arbitration tribunal in Paris after Guinea’s government stripped BSGR of its rights to the deposit in 2014.

BSGR’s case suffered a setback last week when Avidan failed to appear after his lawyers advised him it could jeopardize an Israeli investigation into Guinea bribery allegations. Avidan said via video link from Israel on Thursday that he decided to speak without their approval.

During more than six hours of testimony, Avidan denied allegations that he or Steinmetz’s company had been involved in bribery. Guinea’s lawyers allege that BSGR secured Simandou claims in part through bribes to Mamadie Toure, who they say was the fourth wife of Guinea’s president at the time.

Avidan said Toure was never one of the president’s wives. He said his meetings with her were merely out of courtesy to one of his local colleagues, Ibrahima Sory Toure, who he said was her half-brother. Avidan said he didn’t make payments to her.

“When I got Ibrahim, I wanted to keep working with him,” Avidan testified from Israel. “When I arrived, I got her existence as a fait accompli. It was like something I had to live with,” he said, adding that she “definitely never influenced” any Guinea ministers.

Timely Testimony

The testimony was Avidan’s first public response to the bribery allegations involving Simandou, which some miners consider the world’s largest untapped iron-ore asset.  The deposit and others in Guinea have been the subject of corruption investigations and legal disputes in the U.S., Switzerland and Israel, with allegations and counter allegations drawing in Steinmetz’s company as well as mining giants including Rio Tinto Group and Vale SA. 

Last month in New York, an ex-Wall Street banker who served as Guinea’s mining minister was convicted of laundering $8.5 million in bribes he was accused of taking to help a Chinese company win mining rights in the country.

BSGR has consistently denied wrongdoing and is hoping to obtain compensation through an award from the World Bank’s International Centre for Settlement of Investment Disputes, whose findings are meant to have equal force as those reached through member countries’ courts. The hearings are due to end Friday, before the three-person panel deliberates on the case.

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