Wednesday, February 22, 2012

Bethel Finance: Steinmetz claims not to owe tax in Israel on offshore firms

www.bethelfinance.com
Billionaire businessman Beny Steinmetz is negotiating with the Tax Authority over how much tax he owes for the offshore businesses he controls through complicated control structures.

Steinmetz’s lawyers say he owes nothing to Israel since the businesses have no connection to the country and their client has been a resident of Switzerland for more than a year.

The lawyers say the issue dates from 2006, when Steinmetz was still an Israeli resident. Last month the Financial Times reported that Steinmetz intended to take his Sierra Leone diamond mine Koidu public on the Hong Kong stock exchange. The mine sells diamonds to U.S. jeweler Tiffany, among others.

Steinmetz’s holding company BSG (Beny Steinmetz Group) wants to float Okata, the company that holds the mine, at a valuation of $2 billion to $3 billion, and to raise $400 million to $600 million.

Between 2005 and 2007 Steinmetz floated his companies Bateman Engineering, Bateman Litwin and Nikanor mines on the London stock exchange at a total market cap of billions of shekels.

He also took advantage of the attractive bond market in Israel to issue NIS 1.2 billion in bonds for his energy and mining company TMT, which is held by the BSG group.

In late 2009 he took the two Bateman companies private again.

Steinmetz has companies in Israel as well, including the privately-held oil and gas exploration company Nammex ‏(formerly Scorpio Oil and Gas Exploration‏), which owns 42.5% of the Pelagic offshore gas exploration prospect.

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