* BSGR says Guinea initiated investigations
* Steinmetz, BSGR say allegations are baseless
(Adds background, statement from Guinea)
By Tova Cohen and Barbara Lewis
TEL AVIV/LONDON, Dec 19 Israeli authorities
placed billionaire businessman Beny Steinmetz under house arrest
on Monday over allegations of bribery and corruption in Africa
linked to his mining company, BSG Resources (BSGR).
Steinmetz, along with other Israelis living abroad, is
alleged to have paid tens of millions of dollars to senior
public officials in Guinea to advance their businesses, a police
spokesman said in a statement.
The 60-year-old was detained earlier in the day for
questioning and will remain under house arrest until Jan. 2.
BSGR said in a statement the allegations were baseless and
Yuval Sasson, a lawyer for Steinmetz and BSGR in Israel, said
the proceedings were "a recycling of an old process led by the
government of Guinea...in order to illegally expropriate BSGR's
"These are continuous and baseless attempts meant to conceal
the corruption aimed at illegally expropriating assets," Sasson
said in a statement.
BSGR said in a separate statement that the investigations
were initiated by the government of Guinea with international
police organisations in the United States, Britain and
The Guinean government said Steinmetz's detention was linked
to an investigation it had started in 2011. The inquiry could
implicate many people, but Guinea was not ready to make an
extradition request, a senior government source said.
BSGR described Steinmetz as an adviser to the company, which
is headquartered in the Channel Islands and is a mining arm of
Steinmetz's business conglomerate.
A BSGR spokesman told Reuters that Steinmetz does not sit on
BSGR's board or have an executive role, but "is the beneficiary
of the foundation which owns BSG Resources".
As part of international efforts to improve transparency,
the Guinean government under President Alpha Conde, elected in
2010, launched a review of mining contracts signed before 2011.
Within its review the West African nation investigated how
BSGR obtained the rights to the Simandou deposit, the world's
largest untapped iron ore reserves, in 2008.
Anglo-Australian mining group Rio Tinto and
BSGR have made legal claims against each other over the mining
rights in Simandou.
Last week, Guinea's former minister of mines, Mahmoud Thiam,
was arrested in New York on charges he was involved in bribery
payments linked to Guinea's mining industry.
(Additional reporting by Ari Rabinovitch in Jerusalem and
Saliou Samb in Conakry; Editing by Alexander Smith)