MANHATTAN (CN) — A nearly two-decade long feud between billionaires is at the heart of an African mining dispute, according to a $10 billion fraud and defamation lawsuit against George Soros.
Three BSG Resources companies controlled by Israeli diamond magnate Beny Steinmetz sued Soros in Federal Court on April 14, claiming the currency trader used his “enormous financial clout and influence” to manipulate Guinean politicians to change mining regulations and pry away Steinmetz’s companies rights to mine iron ore at the Simandou reserves.
BSG Resources claims that Soros had “long standing antipathy toward BSGR and Steinmetz and wanted BSGR’s contracts with Guinea to be delayed and terminated or heavily curtailed.”
The three BSG Resources companies are wings of Steinmetz’s BSG Resources Limited. Steinmetz is a multibillionaire who inherited the Geneva-based Steinmetz Diamond Group from his father.
According to the complaint, Soros’ interference with Steinmetz’s business was motivated by a grudge dating back to 1998, stemming from business in Russia and Soros’ alleged hostility towards Israel.
BSG accuses Soros and his Open Society Foundation of tortious interference, conspiracy, fraud and misrepresentation, commercial defamation and prima facie tort. It seeks at least $10 billion in damages.
BSGR was granted exclusive mining rights at Simandou in March 2010, ratified by convention under President Brigadier General Sékouba Konaté.
BSGR claims that before Soros’ obstruction, it had invested $883 million in “the socially constructive project, which would have brought jobs and wealth to Guinea, one of the world’s poorest countries, as well as a nearly $1 billion consumer rail system.”
BSGR says it agreed to reconstruct a 600-kilometer trans-Guinea passenger railway between Conakry and Kankan, and to extend the railway by another 200 kilometers as a sign of good will to the Guinean people.
According the complaint, Soros bankrolled Guinean presidential candidate Alpha Conde, who succeeded Sékouba Konaté as president in December 2010 and Soros then used his ties to Conde to deconstruct Guinean mining regulations to derail Steinmetz’s Simandou project, motivated by malice and personal animus.
BSGR claims that Soros used a network of Soros-controlled non-governmental organizations “to work in unison toward a common goal or purpose – in this case to discredit BSGR and create an echo chamber of false allegations about its legitimate business activities.”
These organizations include the Natural Resource Governance Institute, Transparency International, Open Government Partnership, Extractive Industries Transparency Initiative, Global Witness and Publish What You Pay, according to the complaint, which claims they published defamatory statements about BSGR and Steinmetz.
Michael Vachon, a spokesman for Soros, dismissed the allegations as “frivolous and entirely false.” He called the lawsuit “a desperate PR stunt meant to deflect attention from BSGR’s mounting legal problems across multiple jurisdictions.”
Vachon is an adviser to the chairman at Soros Fund Management (SFM) and a personal spokesman for Soros.
Steinmetz and BSGR were sued by Rio Tinto mining company in 2014, accused of conspiring to interfere and steal mining rights to Simandou from Rio Tinto in 2009. The federal lawsuit claimed BSGR had a reputation for corruption and bribery. That lawsuit was dismissed in 2015.
In the new complaint, the BSGR companies are represented by Louis Solomon with Greenberg Traurig in New York City.