A Gem of a Project and Steinmetz… Who’s Benny Steinmetz Again? Think Kushner…

Dear Readers:

This is being published on 5.3.21 at 11:11am – type edited at 3:05pm.


If this is to be a thorough examination of the facts and circumstances surrounding Steinmetz, one cannot escape the inextricable link he has to Dan Gertler and, well, to Jared Kushner and Ivanka Trump. There are no coincidences here.

We have posted information which should be food for thought below, as well as past stories on this subject.

Steinmentz pillaged in the West African nation of Guinea while Dan Gertler focused on the Democratic Republic of Congo. These men, mining magnates [uhhh… gangsters,] for lack of a better word, just drew maps on their turf. And, while all of this was happening, Kushner was drawing battle lines, protecting each from inside the White House. He helped to negotiate, or at least to facilitate, the parties liaising to raze the Magnitsky Act sanctions placed upon Dan Gertler; while at the same time somehow keeping Steinmetz out of the limelight.

It remains a question of how or why the Suisse government got involved in the Steinmetz case when they helped facilitate payments made by Glencore to Gertler around the sanctions; but as we have said repeatedly, everything is orchestrated. It is a well-choreographed dance.

Let’s see what happens with Gertler. And, well… let’s see where the dust settles on Steinmetz

P.S. Each of these men has denied any wrongdoing.

Jared Kushner
Jared KushnerCredit…Shawn Thew/European Pressphoto Agency

Steinmetz Link To Failed Mining Project To Be Probed In NY

Law360 (April 30, 2021, 8:12 PM EDT) — A New York judge on Thursday agreed to consider additional arguments that Israeli billionaire Beny Steinmetz is the alter ego of a company that owes Brazilian miner Vale SA more than $2.17 billion following a dispute over an ill-fated Guinean mining project.

U.S. District Judge Vernon S. Broderick ordered Vale to provide supplemental briefing in support of its bid to force Steinmetz to respond to its discovery requests, which it sent to the businessman over a year ago.

Read more at: https://www.law360.com/articles/1380519?sidebar=true?copied=1


Swiss Court Finds Israeli Businessman Beny Steinmetz Guilty of Corruption

Israeli billionaire Beny Steinmetz leaves the courthouse after a verdict on corruption charges, in Geneva, Switzerland January 22, 2021. REUTERS/Denis Balibouse


GENEVA (Reuters) – In a landmark verdict in one of the mining world’s most high profile legal cases, a Swiss criminal court found Israeli businessman Beny Steinmetz guilty of corruption and forgery on Friday and sentenced him to five years in jail with a sizeable fine.

The ruling after a two-week trial is a blow for Steinmetz, a diamond trader, whose pursuit of the world’s richest uptapped deposits of iron ore put him at the centre of a battle that has triggered probes and litigation around the world.

Steinmetz said he would appeal the verdict, which also included a 50 million Swiss francs ($56.48 million) fine.

“It is a big injustice,” he told reporters in the courtyard of the Geneva courthouse.

Steinmetz and two others were variously accused of paying or arranging payment of $10 million in bribes between 2006 and 2010 to Mamadie Toure, whom prosecutors say was one of the wives of the former president Lansana Conte, to obtain exploration permits for iron ore buried beneath the remote Simandou mountains of Guinea and of forging documents to cover it up through a web of shell companies and bank accounts.

Toure, who lives in Florida, could not be reached for comment.

All three defendants denied the charges.

Presiding judge Alexandra Banna said Steinmetz and his co-defendants had used fake accounts and attempted to have incriminating documents destroyed to hide their criminal behaviour.

Banna said that Steinmetz had made an immediate profit from the rights to mine and not a cent went to the West African nation of Guinea.

No one from the government in Guinea was immediately available to comment.

Steinmetz, 64, a former Geneva resident who moved back to Israel in 2016, has in the past been ranked as a billionaire and one of Israel’s wealthiest men. Asked by the court to estimate his personal fortune, he said it was $50-80 million.

US News and World Report: continue reading here.

Beny Steinmetz gets jail, Dan Gertler a reprieve

In december 2017 Donald Trump’s administration imposed financial sanctions on Dan Gertler. That came as a shock to the government of Joseph Kabila, who was then the president of the Democratic Republic of Congo. Mr Gertler, who was named alongside several allegedly crooked politicians and businessmen, was one of Mr Kabila’s closest friends. He was also a middlemanwho had sold much of Congo’s wealth in minerals to the world since arriving there in the wake of war in 1997.

America’s Treasury department said that Mr Gertler had “amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals”. Between 2010 and 2012 alone Congo had “lost over $1.36 billion in revenues from the underpricing of mining assets that were sold to offshore companies linked to” the Israeli billionaire, it said. The sanctions froze Mr Gertler’s bank accounts and prevented any firm from doing business with him in dollars.

The Economist: Read here.

Bribe Cases, a Jared Kushner Partner and Potential Conflicts

By Jesse Drucker

  • April 26, 2017

It was the summer of 2012, and Jared Kushner was headed downtown.

His family’s real estate firm, the Kushner Companies, would spend about $190 million over the next few months on dozens of apartment buildings in tony Lower Manhattan neighborhoods including the East Village, the West Village and SoHo.

For much of the roughly $50 million in down payments, Mr. Kushner turned to an undisclosed overseas partner. Public records and shell companies shield the investor’s identity. But, it turns out, the money came from a member of Israel’s Steinmetz family, which built a fortune as one of the world’s leading diamond traders.

The New York Times: Read here.

Mining Tycoon, Steinmetz, Kushner, Guinea, Switzerland and…

Israeli billionaire Beny Steinmetz has been at the centre of an international investigation into alleged bribery to win mining rights in Guinea. (Image from Beny Steinmetz’s website)

Beny Steinmetz: Mining tycoon in Swiss trial over Guinea deal

A billionaire French-Israeli diamond magnate, Beny Steinmetz, has appeared in court in Switzerland to face trial over alleged corruption linked to a major mining deal in Guinea.

He has always denied his company, BSGR, paid multi-million dollar bribes to obtain iron ore mining exploration permits in southern Guinea in 2008.

He travelled to Geneva from Israel for the two-week trial.

If convicted he could face up to 10 years in prison.

Steinmetz, 64, was previously sentenced in absentia to five years in prison by a court in Romania for money laundering.

Swiss prosecutors say Steinmetz paid about $10m (£7.4m) in bribes, in part through Swiss bank accounts, to gain the rights to Guinea’s iron ore deposits in the Simandou mountains.

The area is believed to contain the world’s largest untapped iron ore deposits.

His lawyer Marc Bonnant says “we will plead his innocence”.

Continue reading

Where there’s a Diamond, A Benny Steinmetz and Fake Contracts… There’s a Fraudy

Beny Steinmetz, the Israeli diamond mining magnate, was taken into custody by Israeli police on Monday on suspicion of fraud, obstruction of justice and bribery.

The 61-year-old billionaire, who is one of Israel’s wealthiest men, was detained alongside four other suspects as part of a joint international investigation by Israeli, Swiss and US authorities.

Israeli police gave few details of the allegations but said the five men were suspected of creating fake contracts to move and launder money.

Detectives raided the men’s homes and offices and a judge granted police permission to detain Mr Steinmetz until Thursday for questioning.

Steinmetz, who founded the BSG Resources (BSGR) mining company, denies any wrongdoing.

Appearing before a magistrate’s court in central Israel, the businessman hit out at Israeli investigators and George Soros, the Hungarian-American investor with whom he has had a long-time rivalry.

“I feel terrible that the state of Israel is doing this to me. This is customary in totalitarian states. It’s like a dictatorship that decides and marks people,” Mr Steinmetz said.

“There is nothing, the whole investigation is nothing. There are those who have marked us here. It’s political. George Soros marked me. We did not do anything.”

Mr Steinmetz has not been charged with a crime. A spokesman declined to comment.

Police said in a statement that the men were detained on suspicion of money laundering, fraud, forgery, obstruction of justice and bribery.

The police raids on Monday were the latest in a long string of legal troubles for Mr Steinmetz, who lives mainly in Geneva and has dual Israeli-French citizenship.

Israeli police placed him under house arrest for two weeks in December 2016 on suspicion of bribing officials in the the west African country of Guinea to advance BSGR’s business interests.

car in Guinea
The Simandou project in Guinea has been stalled for years

The house arrest was lifted in January and he was released without charge but on the conditions that he hand over a 100 million shekel (£21m ) guarantee and not leave Israel  for six months.

BSGR gained access to half of Guinea’s giant iron ore seam, known as Simandou, in 2008 after paying a small amount for the mining rights. It later sold half its concession to Brazilian mining giant Vale for $2.5bn, although just $500m was paid.

Simandou is thought to be the world’s richest untapped deposit of iron ore, used in steel. The deposit had been wholly owned by FTSE 100 giant Rio Tinto until BSGR’s arrival.

The Guinean government stripped BSGR of its access in 2014 after concluding that it had bribed its way to the rights.

BSGR denies any wrongdoing and has threatened to file a lawsuit against Mr Soros, accusing him of orchestrating a defamation campaign against the company and encouraging Guinea to strip it of the Simandou rights. Mr Soros’s representatives have dismissed Mr Steinmetz’s claims as a “PR stunt”.

Asher Avidan, a former president of BSGR in Guinea, was taken into custody alongside Mr Steinmetz. Mr Avidan was also placed under house arrest and released in January.

Among the others detained were Tal Silberstein, a prominent Israeli political consultant, and David Granot, the acting chairman of Israeli telecoms giant Bezeq.

Mr Silberstein had been doing polling work for Austria’s Social Democratic Party ahead of parliamentary elections in October but the party cut ties with him after learning of his detention in Israel.

Bezeq said in a statement that Mr Granot’s detention was “not related to the company”.

Congo: Denied Allegations that Kabila’s Government has Slaughtered Villagers, Armed Against the Congolese

Note to Our Readers:

The small portion of the article below is from the Wall Street Journal and was published today. It has been picked up by dozens of news sources worldwide throughout the day. However, to read the entire article requires a subscription to WSJ and on the side of caution, we are not posting the article beyond what is being circulated by other news agencies.

Our interest in this issue beyond the obvious horrors occurring in Congo whether at the hands of Kabila or otherwise, relates back to our stories of the last few days. Kabila apparently has or had close relationships with a number of our mining moguls of recent interest. It is our belief that Kabila’s weapons cache and the strength he amassed to use against his own people was provided by the same mining moguls who have exploited the Congolese people for the diamonds they could mine.

We will continue to cover our recent subjects and the mining of Congo, the potential relationship between Kabila and the subject of our recent posts, and the alleged exchanges of arms for mining contracts and the relationships these different forces have. While we most certainly would not at this juncture conclusive place the mining moguls front and center of Kabila’s alleged atrocities, the providence of any weapons exchanged for mining contracts would certainly raise questions. In our minds, the questions are already there.

To read the article in its entirety click here: https://www.wsj.com/articles/congos-escalating-political-crisis-sends-millions-into-exile-1498037400


Thousands die in conflict between government forces and militias loyal to tribal leaders as President Joseph Kabila clings to power

KYANGWALI, Uganda—The day Bungwile Mabuya discovered her husband’s mangled body near her house in the Democratic Republic of Congo’s Kasai region, she grabbed her children and ran.
The mother of five, who found refuge in a sprawling lakeside refugee camp here, is one of roughly 1.5 million Congolese fleeing a brutal power struggle pitting President Joseph Kabila against traditional chiefs, who still administer large swaths of the vast central African nation.
Government forces and local militias have killed more than 3,300 people in Ms. Mabuya’s home region since October, according to the Catholic Church, which has had its priests count the bodies since then. On Tuesday, the United Nations’ high commissioner for human rights, Zeid Ra’ad Al Hussein, accused Mr. Kabila’s government of arming a new militia he said has slaughtered hundreds of villagers—including pregnant women and toddlers—in Kasai. A government spokesman has denied the allegations.

Dan Gertler/Benny Steinmetz – How Many Resources are Required to Remove Stories from a Google Search?


Dear Loyal Readers:

Dan Gertler, Benny Steinmetz and others have been linked to billions of dollars in fraud, smuggling diamonds, abhorrent mining practices in various African nations, shady deals, hidden bank accounts, potential tax evasion, and staggering illicit behavior. We are in the process of compiling articles and posting and, interestingly, where other stories have been and continue to be optimized fairly quickly on Google, the Gertler/Steinmetz stories seem to magically disappear.

As of about 1 hour ago, it took 28 minutes from publication for a story to be removed from visibility on Google. It is apparently very important to someone that Gertler’s/Steinmetz’s stories not be publicized.

As a countermeasure, call it mining for diamonds, gold or platinum using the Gertler, Steinmetz and Platinum parlance, we ask that each visitor kindly open more than one story, if only for a second. Share the information. Share the sites. Link to related stories. Clearly there is a reason that someone wants us silenced and it is not “philanthropy.”












Dan Gertler: Glencore, Katanga Mining and Ellesmere Global Limited (BVI) – Trust for Gertler’s Family (2012)

To read this article in its entirety: http://foreignpolicy.com/2012/04/23/glencore-what-the-documents-tell-us/

Glencore: What the Documents Tell Us

“Ken Silverstein’s riveting investigation of Glencore, the “biggest company you never heard of.” Below are some of the documents he uncovered in his year of reporting on the hyper-secret, shady global commodities giant.”

It is big, very big. The 1,637-page initial public offering (IPO) prospectus Glencore released last year revealed just how vast its reach is: The company controls more than half the international tradable market in zinc and copper and about a third of the world’s seaborne coal; is one of the world’s largest grain exporters, with about 9 percent of the global market; and handles 3 percent of daily global oil consumption. All of this, the prospectus says, helped the firm post revenues of $186 billion in 2011. Click here to see the prospectus document.

It is not afraid of operating in high-risk “frontier” regions. In a report on the IPO, Deutsche Bank says the company “benefits directly from the volatility” in global commodity prices — especially in poor countries. Consider what the bank identifies as Glencore’s “key drivers” of growth: copper in the Democratic Republic of the Congo (DRC), coal in Colombia, oil and natural gas in Equatorial Guinea, and gold in Kazakhstan. Deutsche Bank delicately calls these places “frontier regions” or “challenging political jurisdictions” — put simply, they all offer a dangerous mix of extraordinary natural wealth and various degrees of instability. (See page 12.)

It is well-connected in failed states. Glencore has managed to do business in the DRC, the poster child of the resource-cursed failed state, with the help of Dan Gertler, a diamond businessman from Israel who is known for his intimate ties to President Joseph Kabila. (He even reportedly has lent Kabila his private jet.) Glencore and Gertler are, through subsidiaries, shareholders in Katanga Mining. In 2009, Glencore sold stock in Katanga at roughly 60 percent of its market value to Ellesmere Global Limited, a British Virgin Islands firm whose “ultimate owner is a trust for the benefit of the family members of Dan Gertler,” according to Canadian insider-trading records. Ellesmere quickly sold the stock back to Glencore at close to full market price, netting a profit of about $26 million.

It pays associates in unusual deals. In another example, detailed in this March 2011 contract, Samref Congo Sprl, a subsidiary 50 percent owned by Glencore, waived its rights of first refusal to acquire an additional stake in Mutanda Mining, a copper and cobalt producer, from Gecamines, Congo’s state-owned mining company. Samref instead recommended that the shares be sold to Rowny Assets Limited, one of the offshore firms owned by Gertler’s family trust. (See clauses C and D on pages 3-4 of the Gecamines contract.) It’s not clear why Samref would have passed on the Gecamines offer, because business records and documents suggest that Gertler’s trust picked up the Mutanda shares for a fraction of their value. Plus, the president and vice president of the Panama-registered Samref Overseas S.A., which owns Samref Congo Sprl, are both Glencore officials, and the vice president, Aristotelis Mistakidis, is even one of the handful of Glencore executives who became billionaires after the IPO. “We preferred to invest our money in developing Mutanda — building the mines and the plant,” Glencore spokesman Simon Buerk said in an e-mail explaining why the firm did not buy the shares.

It knows how to look the other way. In Congo-Brazzaville, Glencore bought oil from shell companies set up by the state oil company’s head, Denis Gokana (conveniently trained at its London office), according to a lawsuit by Kensington International, a Cayman Islands-based corporation. Glencore complied with court orders and was not charged, but the ruling judge wrote that he “did not consider that Glencore’s personnel … could not have appreciated that Sphynx Bermuda [another company named in the suit that had contracted with Glencore] was somehow linked to the Congo (although ignorant of the exact nature of the link) and that payment would ultimately go to the SNPC [National Petroleum Company of the Congo].)

It has a criminal past. Leveraging ties to dictators has always been at the heart of the business empire built by famous fugitive Marc Rich. Although Rich left the firm in the 1990s, Glencore profited handsomely by dealing with Saddam Hussein under the 1996-2003 U.N. Oil-for-Food Program, which allowed the Iraqi dictator to trade limited quantities of oil in exchange for humanitarian supplies. The U.N.’s Independent Inquiry Committee reported in 2005 that Hussein had awarded special “allocations” to companies and individuals who were friendly to the regime — including Pakistani businessman Murtaza Lakhani, a Glencore agent and conspicuous regime sycophant. The Iraq Survey Group, the U.S.-led fact-finding mission sent after the invasion, concluded that Glencore was “one of the most active purchasers” of oil under the Oil-for-Food Program and had paid $3,222,780 in “illegal surcharges.” Glencore was not charged in the scandal. It claimed it was unaware surcharges were being paid and that Lakhani’s high fees reflected the extra risk of doing business with Iraq, not slush money for bribes. (See page 144.)

It stashes money in tax havens. Another reason Glencore is so rich: Its effective global tax rate for 2010 was just 9.3 percent, in large part because nearly half its 46 subsidiaries are incorporated in “secrecy jurisdictions,” opaque financial havens like the Netherlands, according to a report by the NGO Publish What You Pay.

Its business partners have been investigated for bribery. Glencore’s shady dealings reach around the world. To take just one example, a 2008 U.S. Senate report revealed that an unidentified client of the LGT Group, a bank owned by Liechtenstein’s royal family, discussed setting up a Panamanian shell corporation and bogus foundation to pay bribes on Glencore’s behalf. “A small portion of the payments go … to the USA and Panama and may be classified as bribes,” reads an internal LGT memo. The client, a Glencore agent, had set up the account in 2002; prior to that, Glencore had made such payments directly, the memo says. An LGT executive refused to testify to the Senate about whether the bank had set up the Panamanian corporation or foundation as requested.

It has worked with Romanian criminals. In the mid-2000s, Glencore used an Israeli agent named Yoav Stern, who also represented the Romanian interests of Yakov Goldovsky, who had previously been convicted in Russia for asset-stripping state-run enterprises. Another Glencore business partner here was Romanian businessman Marian Iancu. Glencore sold him crude oil through an offshore company he controlled, Faber Invest & Trade, for processing at the Rafo refinery in Romania. Iancu was indicted for tax evasion and money laundering in 2006 and convicted in late 2011. A WikiLeaked U.S. State Department cable described Rafo as “embroiled in a web of corruption, money laundering, fraud and criminal charges” and included Faber among its “shady entities.”

It has done deals with oligarchs. Glencore funneled roughly $2 billion through an offshore company to the oligarch Mikhail Gutseriev, described in a WikiLeaked cable as “not known for his transparent corporate governance.” Reportedly booted by the Kremlin as chief of the state-owned oil firm Slavneft for resisting the company’s privatization, Gutseriev made a comeback with Glencore’s help. The cash infusion allowed Gutseriev to establish RussNeft, now one of Russia’s largest oil companies. Glencore owns nearly half the equity of four of RussNeft’s oil production subsidiaries and has sole rights to market its oil.

It has high-level political protection:  In Kazakhstan, Glencore owns slightly more than half of Kazzinc, a huge gold, lead, and zinc producer. Because corruption can make the country treacherous terrain for foreign investors, they often require a powerful local sponsor with close contacts to the resident, Nursultan Nazarbayev. Glencore’s is one of the best: Bulat Utemuratov, a major investor in Verny Capital, Kazzinc’s second-largest shareholder with a 42 percent stake. In March 2011, a group of opposition politicians issued a public letter complaining that Kazzinc and other former state firms had been privatized under murky conditions that allowed Utemuratov and other insiders to pick up vast stakes thanks to their ties to the ruling family. Glencore could be stripped of its assets in the country, said the letter, adding, “Upon any change of regime in Kazakhstan to a democratic one, any acquisition of any shares in Kazzinc … will be subject to review.”

Please read the article in its entirety from Foreign Policy: http://foreignpolicy.com/2012/04/23/glencore-what-the-documents-tell-us/

Dan Gertler, Benny Steinmetz, Nikanor Plc, the DRC – “STAGGERING ILLICIT BEHAVIOR” – (circa 2005)


Panama Papers unravel DRC mining concession deals

The Panama Papers have thrown fresh light on the illicit nature of copper mining concession deals in the Democratic Republic of Congo, writes Barry Sergeant


The leak of data from Panama-based law firm Mossack Fonseca, dubbed the Panama Papers, has thrown invaluable new light on the identities of the parties involved in the externalization of billions of dollars from the Democratic Republic of the Congo (DRC).

The DRC houses some of the richest, biggest and most prolific mineral assets in the world. But many mines were run down and essentially ruined during the dictatorial, nationalizing, era of Mobutu Seso Seko, from 1965 to 1997.

After the turn of the century, the DRC was faced with stark opportunities. The short history since then shows that the majority of profitable mining assets in the country have been used to enrich a small – but still-unidentified – number of Congolese nationals, along with a small number of foreign nationals, many of whom are known by name.

This enrichment has been achieved through a relatively simple process. A specific DRC mining asset (say, ABC) is sold to an offshore entity, which then sells it on – known as a “flip” – at a massive profit, to another entity. The new owner then raises cash in Western markets and re-develops ABC as a legitimate mining asset. These deals are conducted by entities registered in, or associated with, tax havens, such as the British Virgin Islands.

Read the full response from Mossack Fonseca here

Key Participants

One of the best-known participants in the often unbelievably profitable DRC deals has been Daniel Gertler, an Israeli citizen. His name appears in more than 200 documents in the Panama Papers.

In March 2005, Gertler’s DGI (Dan Gertler International) formed a new firm, Global Enterprises Corporate (GEC), in partnership with Benjamin Steinmetz’s Global Resources (BSGR), and with former DRC mines minister, Simon Tuma-Waku, named as a “special adviser”. Steinmetz, also an Israeli citizen, is one of the biggest De Beers sightholders ‒ authorized bulk purchasers of rough diamonds. His name appears in 282 documents in the Panama Papers.

The key assets in GEC (later renamed Nikanor) were the Katanga province’s KOV, Tilwezembe and Kananga brownfields projects. Nikanor’s primary activities were at KOV (the Kamoto East, Oliveira, Virgule and FNSR orebodies). The objective at the massive ruined mine was to rebuild its facilities, with the aim of producing 250,000 tons a year of London Metal Exchange A-grade copper cathode and 27,500 tons a year of cobalt products. Copper output could be increased over time to 400,000 tons a year, potentially ranking Nikanor as a world-class mine.

Following a preliminary agreement dated 5 May 2004, a joint-venture (JV) agreement had been signed with DRC copper-cobalt parastatal La Generale Des Carriers et Des Mines (Gécamines) in September 2004. The final JV structure was held 75% by GEC and 25% by Gécamines. Total investment required for the project was put at between $600-700 million.

At the time, news of the deal started something of a battle with long-established Katanga copper-cobalt producer George Forrest’s Kinross-Forrest, which later emerged as Katanga Mining, the company that owned assets immediately adjacent to Nikanor’s. The assets of the two companies had previously been operated as a single, large unit; many argued that the assets should never have been separated in the new process of “privatization”.

At this stage Gertler had already been seen in the presence of DRC president Joseph Kabila and appeared to make no attempt to conceal their acquaintance. Gertler would jet into Kinshasa and leave the same night. Gertler, it would emerge, was also increasingly close to Kabila’s closest aide, Augustine Katumba Mwanke.

Immune to Criticism

Following the signing of the Gécamines-GEC JV in September 2004, the anti-corruption Lutundula Commission recommended, when filing its report in June 2005, that ongoing negotiations on the KOV basket of assets, among others, be halted. But on 13 October 2005, a presidential decree ratified the KOV agreement between Gécamines and GEC.

It should be noted that the DRC government often and invariably acts in a dictatorial manner, and one that is generally immune to criticism or scrutiny.

In July 2006 it emerged that Gertler and Steinmetz had placed GEC’S 75% share in KOV into a new corporate vehicle registered in the Isle of Man, Nikanor Plc. With JPMorgan Cazenove acting as advisers and brokers, Nikanor’s directors, headed by Jonathan Leslie (Rio Tinto’s former head of copper operations) launched a roadshow in London in mid-July 2006.

The initial public offer raised £400 million, based on a prospectus promoting Nikanor’s 75% interest in the KOV assets contributed by Gécamines. Nikanor achieved a market capitalisation value of $1.5 billion, and was hailed as the most valuable listing on London’s Alternative Investment Market.

After Nikanor was listed in London, Gertler held 15% of the entity, worth $225 million. Steinmetz controlled nearly 60% of the shares, now worth nearly $900 million. For this value of more than $1 billion, Gertler had initially paid just $3 million. When questioned on this, Gertler said, through an agent, that numbers were irrelevant: “what counted was the money promised for investment”.

While Nikanor had raised $380 million in cash when it listed in London in July 2006, it raised a further $777 million a year later. Much of the second tranche came by way of Glencore, the Switzerland-based commodities trader and resources investor.

Glencore (a name that appears in 660 documents in the Panama Papers) would later confirm that it was allocated 50 million new Nikanor shares. Half of the 50 million new shares allocated to Glencore were confirmed as having been applied for on behalf of Ruwenzori Limited, a special purpose vehicle which, according to Nikanor, is “managed by RP Capital in which a major shareholder is a discretionary trust, in which Dan Gertler is a potential ultimate beneficiary”. The Ruwenzori entity traced back to an address in the Cayman Islands.

The lesson from the listing of Nikanor in London was that Gertler had paid $3 million for assets which had realized a market value of more than $1 billion. Had the DRC government taken this to hand, it would surely have devised a simple international tender procedure for its mining assets, as it continued to privatize. What happened, in practice, was the opposite; Gertler’s activities only intensified, using the opaque waters of tax havens and minimal-disclosure jurisdictions.

Government and Stock Exchange Complicity

The DRC government has been complicit in these activities, as have investors on international stock exchanges. One of the most aggressive attacks on free enterprise started in January 2010, when Gécamines revoked a contract with Canada-listed First Quantum for a joint venture in the Kingamyambo Musonoi Tailings SARL (KMT) copper project.

Up to that time, First Quantum had spent around $750 re-developing a copper retreatment plant at KMT. Leaked evidence indicated that the majority stake in KMT had been sold in January 2010 to the Highwinds Group ‒ Highwinds Properties, Pareas Limited, Interim Holdings, and Blue Narcissus (each registered in the British Virgin Islands and each with a Gibraltar address). The Highwinds Group, as it turned out, was ultimately owned by Gertler. The sellers of KMT were the DRC government, Gécamines, and the La Société Immobilière Du Congo.

The leaked contract stipulated that Highwind would pay $60 million for the assets as a signature bonus. ENRC, a Kazakhstan-based entity, spent $689 million buying control of a stake in KMT, when it bought control of Camrose, which owned the Highwinds entities. For Gertler, the stakes were apparently rising: in this case, for realising value of nearly $700 million, he had had to pay $60 million upfront.

Criminal Investigation

There has been some justice, in a sense, in response to these dubious activities. During 2012 Fasken Martineau, a law firm, recovered $1.25 billion in the case of First Quantum vs Highwinds and Others. The settlement went further in that ENRC also purchased First Quantum’s residual claims and assets in the DRC.

During April 2013, the UK’s Serious Fraud Office opened a criminal investigation into ENRC’s business practices. ENRC stated that the UK authorities were investigating whether it had breached Britain’s rules for listed companies, specifically with acquisitions made in the DRC. In November 2013 ENRC de-listed from the London Stock Exchange

The DRC has long ranked at the forefront of illustrating the billion-dollar “leakages” associated with opaque concession trading. Towards the end of 2010, the DRC government agreed to publish all mining and oil contracts. In 2011, it signed a decree requiring that contracts for any cession, sale or rental of the state’s natural resources be made public within 60 days of their execution.

In 2012, however, the International Monetary Fund (IMF) stopped a loan programme after the DRC government failed to publish full details of a yet another mining deal, involving Gécamines, for a stake in a major copper concession. The recipient was a company registered in the British Virgin Islands.

Following the IMF’s decision to halt three tranches of loans totalling about $225 million, the African Development Bank announced that it was withholding a planned $87 million in budget support. The World Bank had briefly suspended loans in 2010 because of related concerns over concession arrangements.

Illicit Practices ‘Staggering’

If government commitments are not serious, what other steps can be taken? In its reaction to the Panama Papers, the African Union (AU)/United Nations Economic Commission for Africa (Uneca) High Level Panel noting that Mossack Fonseca had “worked with more than 14,000 banks, law firms, company incorporators and other middlemen to set up companies, foundations and trusts for customers.”

“The papers elaborately bring to light issues that the AU/UNECA’s High Level Panel on Illicit Financial Flows from Africa vigorously underscored in the findings in its report released and endorsed by African Heads of State and Government in January 2015.”

Thabo Mbeki, chairman of the High Level Panel, said: “The papers confirm the existence of a network of offshore accounts and complex investment vehicles that drive tax avoidance and evasion. Until now warnings against such vehicles have been taken lightly. The staggering amount of illicit practices and the large number of global actors exposed by the Panama Papers demonstrate that governments of Africa and the rest of the world cannot avoid firm action.”

In a major 2013 study, the African Progress Panel, chaired by Kofi Annan, stated that hundreds of offshore-registered companies were linked to investments in extractive industry concession trading in Africa. The panel noted that many are registered in traditional tax havens, such as the Cayman Islands, the British Virgin Islands and Bermuda.

Some are associated with shell companies registered in the UK, while others are integrated into networks that extend from offshore private banking and trading centres in Switzerland or the US.

Offshore trading makes it possible for investors to hide the real beneficial owners, or the ultimate beneficiaries, of companies. The panel stated that by using multiple investment vehicles, a practice known as “layering”, compounds the problem. The panel stated that this practice is widespread in Africa.

One company operating in Sierra Leone in 2011 used three separate offshore holding companies (two registered in Guernsey and one in Bermuda) with a primary owner registered in Bermuda, that was in turn owned by three separate holding companies (two of which were registered in London and one in China).

Mbeki argues that “we should not misconstrue the release of the Panama Papers as a time for celebration or an end in itself. To the contrary, it is rather a time for deep reflection and regret that we have allowed the practice to persist which is made possible among others by the existence of tax havens/financial secrecy jurisdictions. Now is the time for the global community to act in a firm and comprehensive manner to end the illicit financial flows and close down the tax havens/financial secrecy jurisdictions.”