Steinmetz – No stranger to criminal investigations

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Businessman Beny Steinmetz has been linked in the past to alleged bribery of public officials in Africa and Asia.

Billionaire businessman Beny Steinmetz has been linked to two other overseas criminal affairs in recent years, one of which has become the subject of an investigation in Israel against him. One of the investigations concerns iron ore mining rights in Simandou, Guinea. The Guinean government asserts that the mining franchise obtained by Beny Steinmetz Group (BSG), which is worth tens of billions of dollars, was the result of bribery. The license has been canceled because of these allegations.

Steinmetz is suspected of giving Guinean President Alpha Conde and his wife a $30 million bribe in return for metal mining licenses that generated $5 billion in profits for Steinmetz in 2006-2012. Steinmetz is also suspected of money laundering.

The investigation currently being conducted jointly by the law enforcement authorities in the US, Switzerland, Guinea, and Israel is in the framework of an international effort led by the OECD, to combat bribery of foreign public servants all over the world. The Israeli investigation against Steinmetz became a public investigation last December, when the Israel Police National Serious and International Crimes Unit detained Steinmetz for questioning under caution. Various restrictions have since been imposed on him, including a ban on leaving Israel. According to the police, the investigation established grounds for the suspicions against Steinmetz and his partners.

In the investigation, Steinmetz is saying that the affair is the result of a conspiracy against him by billionaire George Soros and others. BSG subsidiary BSG Resources (BSGR) filed suit against Soros in April, alleging that he had caused it $10 billion in damages with a campaign of slander that deprived it of rights to iron ore deposits in Guinea and other business opportunities around the world. Steinmetz alleges that the investigation involves old affairs that have already been investigated without any real results.

Suspected bribery of Kazakh officials

Another affair, reported by Channel 10 News correspondent Itay Rom, is the alleged involvement of BSG companies in a €1 billion bribery affair involving Italian energy company ENI. The Italian authorities have been investigating this affair for over five years.

BSG group companies are suspected of serving as a conduit for €20 million in bribes to Kazakh officials in order to “grease the bureaucratic wheels” in Kazakhstan, where ENI operate a major Caspian Sea oil drilling site named Kashagan. BSG subsidiary Bateman Engineering won a tender to build a power station at the site for hundreds of millions more than a decade ago.
Steinmetz’s name was also mentioned in the notorious recordings made by Shula Zaken, former secretary of former Prime Minister Ehud Olmert. Among other things, Zaken recorded Olmert in July 2017 saying that he had “helped Steinmetz with a search warrant.” As reported by Channel 10, this was said around the time when the police searched the Bateman’s offices in Israel, together with Italian policemen, at the request of the Italian government. The search found nothing.

Living quarters in the deep sea for tax reasons

The Israel Tax Authority is also showing interest in Steinmetz, due to the NIS 4 billion tax assessment it issued for him in recent years, which the mysterious billionaire has appealed. The appeal raises the question of who owns BSG. Steinmetz says that ownership of the company should not be attributed to him, because he is no more than its consultant (that was his response to the complaints against him in the Guinea and Kazakhstan-Italy affairs). Steinmetz has lived on his yacht off the Nice coast in recent years. His yacht can be reached from the coast by motorboat. This residence was selected for tax reasons.

“Globes” reported the dispute between Steinmetz and the Tax Authority in February 2012, when it was learned that the Tax Authority was demanding hundreds of millions of shekels from Steinmetz – the alleged difference between the tax he paid on his businesses held in various trusts, mainly overseas, and the real tax that the Tax Authority believes he should pay for them.

According to the Tax Authority, the various tax structures created by Steinmetz through these trusts are “excessively creative,” and he is paying less tax in Israel than he should as a result, because he allegedly does not own, manage, or control these businesses. In actuality, the Tax Authority argues, he owns these businesses, is the main decision-maker in them, and is responsible for the major deals conducted in them.

Steinmetz himself asserted at the beginning of the case that what he was doing was legitimate tax planning that complied with the rules for taxation of trusts. The tax assessment office did not accept his claims, and issued an assessment according to its best judgment. Steinmetz appealed this assessment to the District Court.

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