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Financial authorities in the British Channel Islands tax haven of Guernsey have launched an investigation into BSG Resources, the mining arm of Israeli diamond billionaire Beny Steinmetz’s group of companies.
“A joint investigation is being conducted with other law enforcement authorities in relation to matters relating to BSG Resources, a Guernsey-registered company,” Adrian Hale, a senior investigation officer at the Guernsey Border Agency’s Financial Investigation Unit, told Metal Bulletin sister title Steel First on Wednesday September 4.
Companies controlled by or linked to Beny Steinmetz are now under investigation in connection with allegations of fraud and corruption in a total of six jurisdictions.
Justice departments in Guernsey, the UK, Switzerland, France, the USA and Guinea are investigating Steinmetz-linked companies in connection with allegations of mining licence fraud in Guinea.
BSG Resources has strongly denied any wrongdoing in relation to the company’s acquisition of its Simandou licence.
BSG Resources is the mining division of a diversified group of companies with interests in diamonds, real estate and finance, which all bear Beny Steinmetz’s name.
The government of Guinea last year launched an investigation into BSG Resources relating to its acquisition of rights to mine Simandou, one of the world’s largest untapped reserves of iron ore.
That investigation is part of a wider set of reforms instituted by Guinean president Alpha Condé in a bid to stamp out corruption in the country’s mining sector.
BSG Resources is incorporated in Guernsey and has an office in London. The company did not respond to requests for comment on Guernsey’s investigation into its activities at the time of publication.
The USA launched a federal investigation into BSG Resources in January 2013.
In April, US government officials arrested a former BSG Resources agent in Guinea, Frederic Cilins, at a Florida airport on charges including obstructing a criminal investigation, tampering with a witness and falsification of records.
Cilins was denied bail in June by a New York federal judge, who said that he posed a “serious flight risk”.
Swiss and French authorities have launched their own investigations into Beny Steinmetz-linked companies in recent weeks.
On August 29, Swiss police raided the Geneva offices of Onyx Financial Advisors, a financial firm which manages the assets of Steinmetz’s group of companies and shares an address with BSG Resources in London.
Sources familiar with the matter told Steel First that Swiss police were hoping to question senior BSG Resources management, including Steinmetz.
The UK’s Serious Fraud Office is also understood to be investigating Steinmetz and his companies, as first reported by Steel First in April.
A spokeswoman for the department said that she could “neither confirm nor deny” the SFO’s involvement with the case when speaking to Steel First on Tuesday September 3.
Michelle Madsen mmadsen@steelfirst.com Twitter: @mmadsen_SF