Former FTSE 100 miner ENRC has demanded a judicial review of a Serious Fraud Office investigation into its alleged criminal activities, its latest tactic in a long-running battle to end the agency’s five-year probe.
The company, which mines iron ore and bauxite principally in Kazakhstan, has been under investigation since 2013 over allegations it used fraud, bribery and corruption to acquire mining assets in Africa.
ENRC now wants judges to appoint an independent law firm to review the SFO’s handling of evidence and alleged unauthorised contact between prosecutors and the miner’s former lawyers Dechert.
ENRC’s grounds for a judicial review, seen by The Telegraph, include the claim that the SFO misplaced a notebook belonging to the former lead investigator. The miner believes the notebook from 2011 will show that the officer originally concluded there was no criminal case to be made against it.
According to the legal claim, the SFO told ENRC that a senior agency officer checked the notebook out of its archive in March 2012, but when questioned earlier this year, the now former staff member “categorically” denied doing so.
ENRC says the revelation is “alarming” and “consistent with concerns as to a cover-up”. Dmitry Egorov, ENRC general counsel, said: “It is in everyone’s interests that it is properly investigated and those findings made public.”
The SFO appears undeterred in its investigation, however, and has obtained a summons for the current boss of ENRC’s parent company, ERG, to appear before magistrates next week. Benedikt Sobotka, who joined the miner after the period under investigation, is accused of failing to turn up for an interview. The agency declined to comment.
ENRC has always denied wrongdoing and the SFO has said little publicly about the case as charges are still pending. However, a separate lawsuit between ENRC and Dechert has revealed more about the allegations.
The miner hired the law firm in 2011 to investigate reports of wrongdoing but the pair fell out in 2013. ENRC is now suing Dechert, accusing it of holding secret meetings with the SFO and over-charging fees. Dechert has “vigorously” denied these claims.
In a defence filing earlier this year Dechert said it found evidence of ENRC breaking international sanctions and making illegal payments to partners in the Democratic Republic of Congo before being fired by the miner.
A Dechert spokeswoman said: “We stand by the work we did and look forward to the opportunity of defending it in open court. We note that the criminal investigation by the Serious Fraud Office into ENRC is continuing and deplore ENRC’s attempt to discredit that investigation by seeking now to publicise unwarranted allegations against Dechert and its personnel.
“We emphatically reject any suggestion of an improper relationship between Dechert and the SFO or that there was any unauthorised disclosure of information to or from the SFO.”
Last month ENRC won an appeal at the High Court against the SFO, which wanted to use internal documents prepared by Dechert to build its case. The ruling, deemed a major win for the legal profession, means companies can continue to enjoy confidentiality when using law firms to compile internal reports. The SFO said earlier this week it would not challenge the Appeal Court ruling.
ENRC endured a torrid spell as a listed company in London between 2007 and 2013. It was taken private by its three oligarch owners and the Kazakh government after being dogged by accusations of poor corporate governance.
The Telegraph | October 3, 2018