Beny Steinmetz Pressed on Guinea Deals on Second Day of Bribery Trial

(Bloomberg) -- Israeli tycoon Beny Steinmetz was pressed on his deals in Guinea as the businessman testified on the second day of his trial on charges of bribery.

Steinmetz and two others are accused of paying the wife of the former president of Guinea at least $8.5 million in exchange for rights to exploit a giant iron-ore mine in the south of Guinea. The trial is taking place in Geneva as Steinmetz lived there until 2016 and had businesses there.

The trio are also charged with forgery for allegedly creating a complex web of shell companies and share structures to hide the payments. One of these was British Virgin Islands-based Pentler Holdings, which was set up to appear like an independent partner of Steinmetz’s BSG Resources Ltd.’s Guinea unit but became one of the key vehicles for the bribes, prosecutors say. BSGR bought out the unit’s stake in Pentler two years later in 2008, generating $10 million that was used to bribe Toure, they say.

Asked by presiding judge Alexandra Banna about why Pentler choose to cash out of a stake in such a potentially lucrative mining project, Steinmetz said the company may not have the funds or appetite to invest in a project that still carried risk.

“Pentler had no choice but to sell the stake: Either they invested or sold the stake,” Steinmetz, dressed in a dark blue suit, said Tuesday in court.

Pressed by Banna for details on how and to whom the $22 million for the minority stake in BSGR Guinea was paid, he said he didn’t know, citing a “Chinese wall” between him and the administration of BSGR and its subsidiaries.