--Settlement is for EUR90,000 in damages plus legal costs.
--Settlement made without any admission of liability
--BSG Resources says damages will be donated to charities and
good causes working in Guinea
(Adds additional comments from BSG Resources and FTI about the
legal costs)
By Alex MacDonald
LONDON--FTI Consulting LLP said Monday it has agreed to pay
90,000 euros ($119,000) plus legal costs to settle a dispute with
Israel-based billionaire Beny Steinmetz and his mining arm, BSG
Resources Ltd., over allegations that the U.K.-based
public-relations firm has impeded the development of a giant mining
project in Guinea.
The settlement was made without any admission of liability, FTI
said in a statement. "Both FTI Consulting and Lord Malloch-Brown
have always vigorously denied the claims brought against them in
their entirety," FTI said.
FTI Consulting and Mark Malloch-Brown, FTI's Chairman for
Europe, Middle East and Africa, agreed to pay, "substantial
compensation and legal costs to settle the legal actions brought
against them earlier this year," BSG Resources said in a statement.
The damages will be donated to charities and good causes working in
Guinea, it said.
The legal settlement is the latest chapter in a standoff between
BSG Resources and the government of Guinea over the rights to mine
half of Simandou, a forested mountain laden with iron ore. Guinea
last year initiated a widespread review of mining deals signed
between companies--including BSG Resources--and the government of
former dictator Lansana Conte before his death in 2008.
BSG has said it is considering taking the Guinean government to
international arbitration over the matter.
Mr. Malloch-Brown, a former senior United Nations diplomat and
former vice chairman of billionaire financier George Soros's
investment funds, was accused by BSG Resources of using his
position at FTI to relay confidential information to Mr. Soros, who
then passed it on to groups campaigning against the mining
company's operations in Guinea, according to court papers.
BSG alleged that FTI Consulting failed to disclose Mr.
Malloch-Brown's relationship with Mr. Soros, which BSG said was a
conflict of interest, when Mr. Malloch-Brown joined FTI in
2010.
FTI and Mr. Malloch-Brown maintained that these allegations
were, "baseless and without any merit."
FTI said it made an offer to settle all the claims for an amount
that was far less than the costs they would have incurred by
pursuing the case further. A BSG spokesman, however, said that FTI
and BSG had agreed that the public-relations firm would pay all the
legal costs, which amount to a multiple of the damages. An FTI
spokesman said that FTI has agreed to pay all reasonable legal
costs. The exact sum is still being negotiated.
FTI Consulting and BSG Resources terminated their business
relationship toward the end of last year.
BSG Resources acquired its license to develop Guinea's massive
Simandou iron-ore deposit from Mr. Conte, shortly before he passed
away. The concession previously has been held by Rio Tinto PLC
(RIO, RIO.LN), whose ownership was suddenly revoked by Mr.
Conte.
BSG Resources subsequently sold a 51% stake in the project to
Brazilian iron-ore mining company Vale SA (VALE, VALE3.BR,
VALE5.BR).
Write to Alex MacDonald at alex.macdonald@wsj.com
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