(Updates with identity of second businessman, adds details)
By Tova Cohen
TEL AVIV Dec 20 Israeli police arrested a
former business associate of mining billionaire Beny Steinmetz
on Tuesday in a widening inquiry into allegations of bribery and
corruption in Africa.
Asher Avidan, ex-president of a company linked to
Steinmetz's BSG Resources (BSGR) and a former employee of
Israel's Ministry of Foreign Affairs, has been placed under
house arrest until Jan. 2, police said.
The move follows the detention on Monday of Steinmetz, 60,
who 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, police said.
Yuval Sasson, a lawyer for Steinmetz and BSGR in Israel,
said on Tuesday that Steinmetz would fight the allegations and
prove his innocence. Reuters tried to contact Avidan's lawyer
but he was not immediately available for comment.
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.
Israeli police were probing "bribery of a foreign public
employee and money laundering" spokesman Micky Rosenfeld said,
in a joint investigation by agencies from the United States,
Switzerland, Guinea and Israel in coordination with the OECD.
A review by the OECD's Working Group on Bribery in 2015
recommended Israel step up its enforcement efforts.
Steinmetz's Israeli and French passports have been
confiscated and bail set at 50 million shekels ($13 million) in
cash and another 50 million shekels in property.
Avidan also holds Israeli and French passports, which will
also be confiscated. His bail was set 1 million shekels with
another 8 million shekel guarantee to be signed by a third
Sasson said on Monday the proceedings were "a recycling of
an old process led by the government of Guinea ... in order to
illegally expropriate BSGR's mining rights".
In an interview with Israel's Army Radio on Tuesday, when
asked how Steinmetz's spirits were, Sasson said he was "strong
and more determined than ever to prove his innocence".
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".
(Additional reporting by Maayan Lubell in Jerusalem and Barbara
Lewis in London; Editing by Greg Mahlich and Alexander Smith)