By Tova Cohen
TEL AVIV (Reuters) - Israeli police said on Tuesday they have arrested a second businessman in an investigation concerning allegations of bribery and corruption in Africa involving mining billionaire Beny Steinmetz.
"The suspect arrested today will appear before the court as the investigation advances," police spokesman Micky Rosenfeld said in a statement without identifying the second businessman.
Steinmetz was placed under house arrest on Monday. Along with other Israelis living abroad, he is alleged to have paid tens of millions of dollars to senior public officials in Guinea to advance their businesses, police said.
Rosenfeld did not say whether the man arrested on Tuesday was linked to Steinmetz's mining company, BSG Resources (BSGR). He said police were investigating "bribery of a foreign public employee and money laundering."
The joint investigation is being conducted by agencies from the United States, Switzerland, Guinea and Israel in coordination with the OECD.
A review by the OECD's Working Group on Bribery in 2015 recommended Israel step up its enforcement efforts.
"Israel is not sufficiently proactive in detecting and investigating foreign bribery, with no prosecutions over the past seven years, despite 14 allegations of foreign bribery involving Israeli individuals or companies," the review said.
The 60-year-old Steinmetz, who also has French citizenship, will remain under house arrest until Jan. 2. His Israeli and French passports have been confiscated and bail set at 50 million shekels ($13 million) in cash and another 50 million shekels in property.
BSGR said in a statement on Monday 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 Guinea ... in order to illegally expropriate BSGR's mining rights". [L5N1EE237]
In an interview with Israel Army Radio on Tuesday, when asked how Steinmetz's spirits were, Sasson said he was "strong and more determined than ever to prove his innocence".
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".
As part of international efforts to improve transparency, the Guinean government under President Alpha Conde, elected in 2010, launched a review of mining contracts signed before 2011.
Within its review the West African nation investigated how BSGR obtained the rights to the Simandou deposit, the world's largest untapped iron ore reserves, in 2008.
Anglo-Australian mining group Rio Tinto and BSGR have made legal claims against each other over the mining rights in Simandou.
(Additional reporting by Maayan Lubell in Jerusalem and Barbara Lewis in London; Editing by Greg Mahlich)