By Tova Cohen and Barbara Lewis

TEL AVIV/LONDON (Reuters) - Israeli authorities placed billionaire businessman Beny Steinmetz under house arrest on Monday over allegations of bribery and corruption in Africa linked to his mining company, BSG Resources (BSGR).

Steinmetz, along with other Israelis living abroad, is alleged to have paid tens of millions of dollars to senior public officials in Guinea to advance their businesses, a police spokesman said in a statement.

The 60-year-old was detained earlier in the day for questioning and will remain under house arrest until Jan. 2.


BSGR said in a statement that the allegations were baseless and Yuval Sasson, a lawyer for Steinmetz and BSGR in Israel, said the proceedings were "a recycling of an old process led by the government of order to illegally expropriate BSGR's mining rights".

"These are continuous and baseless attempts meant to conceal the corruption aimed at illegally expropriating assets," Sasson said in a statement.

BSGR said in a separate statement that the investigations were initiated by the government of Guinea with international police organizations in the United States, Britain and Switzerland.

A Guinean government spokesman declined to say whether the African country was involved in the case, but said the government would fight corruption and uphold the principle of judicial independence.

"The Guinean government will assume its responsibilities and will respect the commitment of the head of state to fight against corruption," Damantang Albert Camara said.

BSGR described Steinmetz as an adviser to the company, which is headquartered in the Channel Islands and is a mining arm of Steinmetz's business conglomerate.

A BSGR spokesman told Reuters that Steinmetz does not sit on BSGR's board or have an executive role, but "is the beneficiary of the foundation which owns BSG Resources".

A Guinean government panel reviewing the West African nation's mining deals investigated how BSGR obtained the rights to the Simandou deposit, one of the world's largest untapped iron ore resources, in 2008.

Mining giant Rio Tinto and BSGR have both launched legal claims over the rights to Simandou.

Guinea's former minister of mines, Mahmoud Thiam, was arrested in New York last week on charges he was involved in bribery payments linked to Guinea's mining industry.

(Additional reporting by Ari Rabinovitch in Jerusalem and Saliou Samb in Conakry; Editing by Alexander Smith)

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