Mining company asks court to reveal Beny Steinmetz’s NYC real estate plays

Vale seeks info from HFZ Capital, RFR Holdings

National /
May.May 07, 2020 02:17 PM
Beny Steinmetz and a rendering of The XI at 76 11th Avenue (JACK GUEZ/AFP via Getty Images; BIG)

Beny Steinmetz and a rendering of The XI at 76 11th Avenue (JACK GUEZ/AFP via Getty Images; BIG)

For years, Israeli billionaire Beny Steinmetz has denied any connection to New York real estate.

But a Brazilian mining company that’s trying to collect $2 billion from the embattled diamond trader says Steinmetz has “fraudulently” poured $500 million into New York projects, and it’s asking the courts to help recoup the money.

Vale SA, which last year won an arbitration against BSG Resources Ltd., a company tied to Steinmetz, asked the U.S. District Court in New York to compel developers Aby Rosen, Ziel Feldman and René Benko to disclose real estate transactions with Steinmetz.

For years, Steinmetz, who was implicated in an alleged bribery scheme to win a lucrative mining contract in Guinea, has been linked to Feldman’s HFZ Capital, developer of the ultra-luxury 76 Eleventh Avenue. Last year, the Wall Street Journal revealed Steinmetz also backed Benko, the founder of Austria’s largest private real estate company, which teamed up with Rosen’s RFR to buy the Chrysler building for $150 million.

In an application for a discovery order filed last month, Vale alleged that companies tied to Steinmetz invested in 13 projects with HFZ, including 12 in New York and one in Chicago.

HFZ has maintained it has “no involvement” with Steinmetz or his companies. “Mr. Steinmetz is not an investor in HFZ or any of its developments,” the company said in a statement. “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.”

The battle between Vale and Steinmetz’s BSG Resources dates back to 2014. Previously, they were partners on a massive iron-ore mining project in Guinea. In 2014, Guinea’s government rescinded their mining rights after an investigation reportedly found that Steinmetz’s associates bribed government officials. Vale subsequently went after BSG to recoup its $500 million stake in the joint venture, plus $700 million in mine development costs.

“Vale is seeking documents related to real estate transactions between the respondents and the defendants… in order to ascertain whether the $500m fraudulently obtained from Vale was used in the purchase, financing, or sale of any of these real estate assets, and where the traceable proceeds of the $500m payment are today,” Vale said in court documents.

A spokesperson for Steinmetz said Vale was pursuing a “budget-less scorched earth litigation policy.”

In 2016, Steinmtz was briefly under house arrest in Israel over the allegations but he and BSGR settled with Guinean authorities last year. Last summer, Swiss prosecutors moved to try Steinmetz and his mining company for using Swiss bank accounts in the alleged bribery scheme.

BSG Resources has also filed for bankruptcy in the U.S., listing a claim against investor George Soros as its only asset.
[FT, WSJ] — E.B. Solomont


Related Articles

arrow_forward_ios
Vanke US managing director Kai-yan Lee, RFR’s Aby Rosen and 100 East 53rd Street (Photos via Foster + Partners and Getty)

Vanke seeks to remove RFR from Midtown condo project

Vanke seeks to remove RFR from Midtown condo project
Ziel Feldman and 11 East 68th Street (Getty, Google Maps)

Take my condo, please! Ziel Feldman puts his own UES pad on the market

Take my condo, please! Ziel Feldman puts his own UES pad on the market
HFZ's Ziel Feldman and CIM's Shaul Kuba (Getty, iStock)

HFZ sues CIM to halt condo foreclosure sale

HFZ sues CIM to halt condo foreclosure sale
HFZ Capital principals Ziel Feldman and Nir Meir with 1135 Lexington Avenue (Gettyl; HFZ; Google Maps)

HFZ sued over delinquent loans at Upper East Side project

HFZ sued over delinquent loans at Upper East Side project
100 East 53rd Street,  Vanke US managing director Kai-yan Lee, and RFR's Aby Rosen (Photos via Structure Tone and Getty)

Aby Rosen accuses Chinese partner of “power grab” after condo loan default

Aby Rosen accuses Chinese partner of “power grab” after condo loan default
From left: Michael Fuchs, Aby Rosen, Brandon Singer and Michael Cody (Getty, iStock)

Aby Rosen, Michael Fuchs back new retail brokerage

Aby Rosen, Michael Fuchs back new retail brokerage
HFZ Chairman and Founder Ziel Feldman (Credit: Monica Schipper/Getty Images)

Four of HFZ’s condo loans being shopped in foreclosure sale

Four of HFZ’s condo loans being shopped in foreclosure sale
522 Fifth Avenue and RFR Realty’s Aby Rosen (Credit: Getty Images; Google Maps)

Aby Rosen snags $224M loan for Midtown office building

Aby Rosen snags $224M loan for Midtown office building
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...