• GUINEA
• MINING

Steinmetz gets five years for bribery

Judge Alexandra Banna in Geneva says that 'Steinmetz was the main beneficiary' of a criminal operation to secure mining rights in Guinea. 'All important decisions were taken with his agreement'

A Geneva court sentenced mining magnate Beny Steinmetz to five years in prison on 22 January for bribery and money-laundering. The bribes were paid to obtain rights to mine the vast Simandou iron ore deposit in Guinea and the money-laundering charges concerned the fictitious transactions which concealed the source of the bribes (AC Vol 62 No 2, Inside the Swiss charges against Steinmetz and passim).

Steinmetz was found to have paid millions of dollars to Mamadie Touré, one of then-Guinean President Lansana Conté's four wives, for the mining licences between 2006 and 2012. Her influence ensured the blocks were stripped from mining giant Rio Tinto in December 2008 and handed to Beny Steinmetz Group Resources (BSGR).

BSGR paid nothing for the rights – although it claimed to have invested $160 million – and then sold 51% on to major Brazilian miner Vale for $2.5 billion. Vale won a $2bn award against BSGR in arbitration in London in April 2019, and it is suing Steinmetz and five of his associates for payment.

The President of Geneva's Tribunal Correctionnel, Alexandra Banna, said that BSGR's denials of the bribery were 'absurd' and 'mendacious', and that Steinmetz played a direct role, reports Switzerland's Tribune de Genève. The payments were the result of a 'one sole wish: to corrupt the Guinean president', she said. The case made Swiss history as its first ever international bribery trial.

Steinmetz's main middleman in obtaining the licences, Frédéric Cilins, got three-and-a-half years, and a 5 million Swiss franc fine. Cilins established and largely managed the relationship with Touré. He was sentenced to two years in prison in New York in 2014 for obstructing justice by trying to bribe Touré to destroy incriminating evidence of contracts with BSGR and its middlemen, while being secretly recorded by the FBI.

Steinmetz has said he will appeal, and he will remain at liberty during that process. He had argued he was no more than an adviser and roving ambassador for the company that bore his name. Cilins's defence was that the payments were not bribes but pre-financing for a joint business in food products. 

A third defendant, Sandra Merloni-Horemans, received a two-and-a-half year suspended sentence and SFr50,000 fine, for her role. Merloni-Horemans, who had worked as a company administrator for Steinmetz and his father for over 20 years, says she had no role beyond processing documentation on instructions from company executives. 

See Africa Confidential's exclusive account of the prosecution case and the evidence in the trial, Inside the Swiss charges against Steinmetz.

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