Billionaire vs. Billionaire: Israel’s Steinmetz Sues Soros

A mining company owned by one of Israel’s wealthiest businessmen filed a suit on Friday against the Jewish-American billionaire George Soros, accusing him of a long-running campaign to sabotage his business efforts in the African country of Guinea, Bloomberg reported Saturday.

The plaintiff, BSGR, is controlled by diamond and mining magnate Beny Steinmetz, who according to Forbes is Israel’s 18th richest citizen with a net worth of $1.1 billion. He resides in Geneva and is a global player in the diamond-mining industry.

The lawsuit filed by BSGR in the US District Court in the Southern District of New York alleges that Soros funded a number of law firms, transparency groups, private investigators and Guinean government officials to ensure that BSGR lose its concession to the Simandou iron mine in southern Guinea, Bloomberg reported.

BSGR lost its mining rights to Simandou in 2014 over allegations of corruption, which the company claims were concocted by Soros due to a long-running feud between the two billionaires beginning in 1998 over a business dispute in Russia and Soros’s alleged animus towards Israel.

“To Soros, Steinmetz’s success, as well as his active, passionate promotion of Israeli life, business and culture are anathema,” Bloomberg quoted BSGR as saying in the complaint.

“Soros is also well-known for his long-standing animosity toward the state of Israel,” the statement said.

Soros has spent millions of dollars funding NGOs in Israel, most of them promoting democracy, pluralism and the protection of the rights of Israel’s minority Arab population.

According to Bloomberg, the suit marks the first time that BSGR has taken legal action against Soros, despite claiming for years that he promoted the corruption allegations that led the company to lose its rights to Simandou.

In December, Steinmetz was arrested in Israel on suspicion of money laundering and bribery charges in relation to Simandou following a wide-ranging investigation carried out jointly by agencies from the US, Switzerland, Guinea and Israel in coordination with the OECD.

Steinmetz, who according to the Israel Police, is accused of paying millions of dollars in bribes in the Republic of Guinea in exchange for advancing his business interests in the country, was later released from house arrest in January.

The case in Israel against Steinmetz revolves around the purchase by BSGR of Simandou, for which it allegedly shelled out $165 million in exploration costs. It sold half of it several years later for $2.5 billion.

According to the allegations, BSGR won the concession for the mineral-rich Simandou range, which had been stripped from the Rio Tinto mining corporation, after Steinmetz cultivated a close relationship with then-Guinea president Lansana Conté, who died in 2008.

One of Conté’s wives, Mamadie Touré, has been cooperating with an FBI investigation into allegations that Steinmetz bribed Conté through her. In 2014, former BSGR adviser Frederic Cilins was sentenced to two years in prison in the US for trying to convince Touré to destroy evidence.

BSGR has denied it was involved in bribery of a foreign public employee and money laundering.

In the lawsuit filed Friday, BSGR alleges that the decision by Guinea’s government to revoke its license to Simandou was based on false information and that Toure received $50,000 from an adviser to Guinean President Alpha Condé and another $80,000 from an “agent or affiliate of Soros,” according to Bloomberg.

The company said that its suit is built on an email from a senior Soros executive concerning the ties between Guinea and BSGR over the mining contract, as well as from information provided by witnesses that Soros personally pushed for the company to lose its mineral rights.

“Soros’s financial clout gave him power over Guinea’s processes of government, which he then thoroughly abused,” Bloomberg quoted BSGR as saying in the suit.

Soros was “motivated solely by malice, as there was no economic interest he had in Guinea,” the company added.

3 replies
  1. Joe Levin
    Joe Levin says:

    Companies controlled by Israeli mining magnate Beny Steinmetz sued fellow billionaire George Soros, claiming he cost them at least $10 billion through a defamation campaign that stripped them of rights to an iron ore deposit in Guinea and other business opportunities around the world.

    Soros funded law firms, transparency groups, investigators and government officials in Guinea in a coordinated effort to ensure BSG Resources Ltd. lost the rights to the Simandou deposit in April 2014, BSGR said in a complaint filed Friday in Manhattan federal court.

    After years of BSGR accusing Soros of propagating corruption allegations which resulted in its loss of Simandou, this is the first time it took direct legal action against him. In the complaint, BSGR alleges that Soros was driven by a grudge dating back to 1998 around a business in Russia and his alleged hostility towards Israel.

    “To Soros, Steinmetz’s success, as well as his active, passionate promotion of Israeli life, business and culture are anathema,” BSGR said in the complaint. “Soros is also well known for his long-standing animus toward the state of Israel.”

    Soros’s spokesman Michael Vachon didn’t immediately respond to an email or messages left on his work and mobile phone outside of regular business hours.

    Simandou, hailed by mining companies as the richest untapped iron ore site in the world, has also been the subject of numerous court fights. Rio Tinto Group sued Steinmetz, accusing him and BSGR of conspiring with Vale SA to steal the rights to the deposit. That lawsuit was thrown out in 2015 by a federal judge in New York. BSGR lawyers demanded billions of dollars in damages from Rio Tinto in December after Rio announced that it had informed law enforcement agencies of a $10.5 million consultancy payment to a friend of Guinea’s president.

    FTI Settlement

    BSGR’s former public relations adviser FTI Consulting LLP in 2013 settled a London lawsuit that claimed it was part of Soros’s campaign against the mining company. FTI said it didn’t admit any wrongdoing.

    Steinmetz has also been investigated and questioned by Swiss and Israeli law enforcement officials on suspicions that he paid bribes to help his company win a stake in Simandou. No charges have been laid.

    Steinmetz and BSGR originally lost their rights to Simandou, because the Guinean government found that they obtained the permits after paying millions in bribes, including to Mamadie Toure, the fourth wife of Guinea’s former president.

    The government’s decision was based on fabricated reports by Soros-funded companies, BSGR said in the complaint. Toure, who implicated BSGR and Steinmetz, received $50,000 from an adviser to President Alpha Conde and $80,000 from an “agent or affiliate of Soros,” according to the complaint.

    A spokesman for Conde didn’t answer calls outside of regular office hours. Toure couldn’t be immediately reached for comment.

    BSGR said its case is supported by an email from a senior Soros investment executive in New York relating to Guinea’s interactions with BSGR around their mining contract and information from witnesses that Soros had personally demanded BSGR be pushed off Simandou.

    “Soros’s financial clout gave him power over Guinea’s processes of government, which he then thoroughly abused,” BSGR said in the complaint. Soros was “motivated solely by malice, as there was no economic interest he had in Guinea,” the company said.

    The case is BSG Resources (Guinea) Ltd. v. Soros, 17-cv-02726, U.S. District Court, Southern District of New York (Manhattan).

  2. Joe Levin
    Joe Levin says:

    Rio Tinto’s Simandou mine nightmare has taken a colourful twist, with the mining giant dragged into a $10 billion court brawl between Israeli magnate Beny Steinmetz and fellow billionaire and hedge fund legend George Soros.

    Companies associated with Mr Seinmetz, known as BSG Resources, lodged a lawsuit in America on Friday claiming that Mr Soros and his “minions” had caused the Guinea government to revoke valuable mining licences and then mounted a global reputation-damaging campaign.

    The motivation, the claim says, was an antipathy between Mr Soros and Mr Steinmetz stretching back to a Russian deal that went wrong in the 1990s and Mr Soros’ alleged hostility towards Israel.

    In the court documents, BSG claims Rio Tinto was party to secret meetings with Mr Soros and the Guinea government, that its staff were part of a law firm’s investigation that contributed to BSG being stripped of a valuable mining licence and that a former high-ranking Rio Tinto staffer was part of alleged global conspiracy to have Mr Steinmetz criminally investigated.

    Simandou has given rise to a series of corruption proceedings. Mr Steinmetz is under criminal investigation by American and Israeli authorities while Rio Tinto’s dealings in Guinea are subject of an investigation by American and British agencies over a suspect $10.5 million payment.

    The BSG claim points to the Rio Tinto investigation, noting that high-ranking executive Alan Davies had left the company; Debra Valentine, a legal executive, had been suspended; and outgoing chief executive Sam Walsh’s retirement payment was delayed. BSG lawyers demanded billions of dollars in damages from Rio Tinto after that scandal broke late last year.

    But that claim is dwarfed by the new and highly personal writ against Mr Soros.

    “Soros has spent untold millions fabricating a positive public image of himself and organisations he controls,” the claim lodged in the New York District Court says.

    “Yet in reality Soros is a racketeer billionaire who acts in utter disregard of the rule of law and the rights of others.”

    Mr Steinmetz accuses Mr Soros of “puppeteering” the Guinean government into tearing up a contract applying to BSG Resources’ iron ore projects.

    “Plaintiffs’ losses at the hand of Soros measure at least $10 billion.”

    Mr Steinmetz’s suit alleges that Mr Soros was close to Guinean President Alpha Conde and supported his election in 2010. Then, the suit says, Mr Soros persuaded Mr Conde to make BSG pay significantly more money to the government or lose its contracts.

    When BSG refused, Mr Steinmetz alleges, Mr Soros set about trying to get BSG’s partner, Brazilian giant Vale, to make a $500 million payment and push BSG off the site.

    The suit claims to have documents detailing the approaches, including one email from Vale’s former chief executive Murilo Ferreira that mentions conversations with Mr Soros

    Not long after the election of Mr Conde the Guinean government requested Mr Soros’ help in reforming the country’s mining industry.

  3. Joe Levin
    Joe Levin says:

    Mining magnate Beny Steinmetz has told a US court a $US10.5 million “bribe” Rio Tinto allegedly paid to secure a vast mining concession in Guinea occurred “under the watch and knowledge” of two of the company’s most senior executives, Tom Albanese and Sam Walsh.

    The claims by the Israeli diamond tycoon were made as part of a legal action where Mr Steinmetz is suing George Soros for $US10 billion ($13.2bn), alleging that the hedge fund billionaire orchestrated a global campaign of defamation and fraud to strip him of mining rights in Guinea, west Africa.

    Mr Steinmetz’s suit, filed in a New York federal court on Friday night by his company BSG Resources, is the latest twist in a decade-long power struggle over the giant Simandou iron ore project — a development that has embroiled Rio Tinto in bribery allegations.

    In the filing, obtained by The Australian, Mr Steinmetz claims a Soros-funded network of lawyers, officials and pressure groups mounted a campaign to strip his company of the asset after it refused to pay bribes to Guinea’s government — which had been publicly backed by the Hungarian-American financier.

    Mr Soros is also accused of instigating an international criminal investigation into Steinmetz — who was placed under house arrest in Israel in December, BSG claims, but later released without charge.

    The suit labels Mr Soros as a “racketeer billionaire”.

    A spokesman for Mr Soros did not respond to requests for comment.

    Mr Steinmetz has long accused Mr Soros of conspiring to oust him from Simandou, but this is the first time he has followed through with legal action.

    Simandou — the world’s biggest untapped iron ore deposit — is located deep in the Guinean jungle. BSG was granted rights to half the project by Guinean dictator Lansana Conte, just days after he repossessed the project from Rio Tinto in 2008 and shortly before he died. It was dubbed the “deal of the century” because Mr Steinmetz was granted the concession free and sold a share in it to Vale of Brazil for $US2.5bn.

    But in 2014 a special technical committee in Guinea found BSG had acquired Simandou corruptly and stripped it of its rights, saying it had paid millions in bribes.

    Mr Steinmetz claims mining companies, including Rio Tinto, that agreed to the new government’s extortionist demands” were allowed to keep their tenements.

    It is alleged Mr Soros and a non-government organisation he funds, the Open Society Foundations, “and their agents were directly involved in discussions with Rio Tinto that led to this agreement”.

    “In connection with the Rio Tinto agreement, Rio Tinto paid a $US10.5m bribe to Francois de Combret, a ‘fixer’ for Rio Tinto under the watch and knowledge of the former CEO, Tom Albanese, as well as the head of iron ore, Sam Walsh,” Mr Steinmetz alleges.

    Mr Albanese and Mr Walsh could not be reached last night but Mr Walsh has previously maintained that he always acted lawfully.

    BSG’s filing is not the first legal action over Simandou. Rio Tinto had sued Mr Steinmetz, accusing him of conspiring with BSG and Vale to steal the rights to the project. That lawsuit was thrown out by a judge in 2015.

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply