Mining Company Alleges Diamond Trader Stashed Money in New York Real Estate
May 07 2020 - 11:02AM
Dow Jones News
By Konrad Putzier
A Brazilian mining company is turning to a U.S. court to obtain
information related to its allegations that an Israeli diamond
trader made undisclosed investments in New York City real
estate.
In 2019, Vale SA won a $2 billion arbitration award against a
company tied to diamond trader Beny Steinmetz. The Brazilian miner
has been trying to collect the money since then, and it has been
trying to track Mr. Steinmetz's holdings around the world.
Vale is asking a U.S. District Court in New York to order a
number of real-estate companies to turn over information that Vale
alleges could show that Mr. Steinmetz made certain property
investments, according to an application for a discovery order
filed last month with the court.
The mining company alleged in the filing that entities
affiliated with Mr. Steinmetz invested in 12 properties in New York
City and one in Chicago through a joint venture with New York
developer HFZ Capital Group.
A representative for HFZ said in a statement: "HFZ Capital Group
has no involvement with Benny Steinmetz or his companies. Mr.
Steinmetz is not an investor in HFZ or any of its developments. For
some unknown reason, Vale is casting a wide net to harass multiple
real-estate companies and drag them into their foreign dispute. HFZ
has no information relevant to that dispute and we look forward to
the court clarifying these details in the near future."
In a statement, a spokesman for Mr. Steinmetz accused Vale of
pursuing a "budget-less scorched earth litigation policy." Vale
declined to comment.
The April filing adds a new wrinkle to one of the mining world's
most high-profile legal disputes.
A decade ago, Vale and Mr. Steinmetz's BSG Resources Ltd.
launched a joint venture to develop a massive iron-ore mine in
Guinea. In 2014, Guinea's government revoked the venture's right to
develop the mine after an investigation concluded that people close
to Mr. Steinmetz bribed a previous administration.
Vale has been trying to recoup the $500 million it paid BSG for
a stake in the venture, along with more than $700 million it spent
developing the mine.
Following the $2 billion arbitration award in a London court,
BSG Resources filed for bankruptcy in the U.S. last year, citing as
its only assets a legal claim against investor George Soros.
Write to Konrad Putzier at konrad.putzier@wsj.com
(END) Dow Jones Newswires
May 07, 2020 10:47 ET (14:47 GMT)
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