Steinmetz Transfers His Interest in Family Diamond Business to Brother

Denies move is linked to probe into his mining franchise in Guinea.

Ora Coren
Ora Coren
Beny Steinmetz will probably be denied the rights to extract iron ore deposits in Guinea due to concerns about corruption and bribery.
Beny Steinmetz will probably be denied the rights to extract iron ore deposits in Guinea due to concerns about corruption and bribery.Credit: Tomer Appelbaum
Ora Coren
Ora Coren

Beny Steinmetz, the Israeli billionaire whose fortune derives from the diamond business, has sold his 37.5% stake in the family’s cutting and polishing firm, his spokesman said on Sunday. But he denied the move was connected to an ongoing probe into Steinmetz’s African mining interests.

The spokesman was confirming a report over the weekend in the Swiss daily Le Temps that Steinmetz had handed over his stake in Steinmetz Diamond Group to his brother Daniel against the backdrop of allegations of improprieties by Beny Steinmetz in connection with mining interests in the West African country of Guinea.

According to reports in Britain, the United States and Guinea, BSGR, a firm controlled by a trust in which Steinmetz is a beneficiary, is under investigation on suspicion that it bribed officials to obtain the rights to a huge mining concession in the country. The mining franchise was obtained when the country was ruled by its late president Lansana Conte. As far as is known, Steinitz is involved in management of BSGR.

Steinmetz’s spokesman termed the report in the Swiss daily inaccurate, asserting that the shares were transferred as part of an ordinary business transaction. Steinmetz, he said, will continue to be engaged in mining, distribution and trade in diamonds, areas in which profit margins are higher than in cutting and polishing. There is no connection between the sale and the controversy in Guinea involving Steinmetz's BSGR firm, the spokesman insisted.

About six months ago, TheMarker cited industry sources saying that Steinmetz had sold his interest in the diamond company. The speculation in the industry at the time was that the move was made amid allegations of improprieties by Steinmetz in Guinea and that by divesting of his diamond interest, he was seeking to preserve the family company’s right to receive allocations of rough diamonds from the world diamond giant De Beers. It was thought that it would be difficult for De Beers to continue to supply the family with rough diamonds if Beny Steinmetz was under any cloud of suspicion.

Because Steinmetz’s mining interests are separate from his diamond polishing concern, the sources explained, his divesting from the diamond business would allow the company to continue to do business with De Beers. At the time, a spokesman for Steinmetz denied he was selling his interest.

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