MAC: Mines and Communities

A peculiarly British taste of justice

Published by MAC on 2019-11-07

London Calling on recent mining cases

This website has endeavoured, over some years, to bring two formerly London-listed mining companies to judicial heel for numerous violations overseas.

Running an invidious gambit - from human rights abuses, land theft, through illegality, trickery and shareholder malfeasance - the outrages committed by Vedanta Resources between 2004 and 2018 have been amply recounted on MAC.

Not to mention the Indian mega-monster's final act of cowardice in October a year ago [see: Last of the summer whine? ]

ENRC - Eurasian National Resources Corporation - took a somewhat different path, resulting in its own inauspicious retreat from the United Kingdom  in 2013, after alleged corrupt and distinctly oppressive activities in DR Congo.

However, before the Kazakhi oligarchist enterprise was able to finally quit "the green and pleasant" country, it was sujected to scrutiny by the British Serious Fraud Office (SFO), thanks to detailed ongoing examination by the highly resourceful RAID [see: When mining giant ignored censure by NGO].

Despite intricate ploys, designed by ENRC's lawers to quash the SFO probe, a UK judge has now told the company it can't escape allegations of impropriety.

The "long arm" of British corporate law failed to swing at all, when confronted by the machinations of a son of its former fiefdom.

Is there any prospect that this time it may succeed?

[London Calling is produced by Nostromo Research, and does not necessarily reflect opinions by any other party. Reproduction is welcomed under a Vreative Commons Licence]

Mining tycoons lose challenge to UK bribery investigation

Bloomberg News

5 November 2019

A U.K. judge dismissed efforts by mining tycoons to stop British prosecutors from bringing charges in a wide-ranging investigation into  fraud, bribery and corruption, bolstering the Serious Fraud Office in one of its longest-running and most sensitive investigations.

Judge Michael Supperstone on Tuesday ruled that the SFO didn’t have to  restart an independent review assessing whether its probe into Eurasian Natural Resources Corp., a now defunct mining company owned by three  wealthy businessmen from the former Soviet Union, had been tarnished by impropriety. He also said the SFO didn’t have to give an undertaking not  to bring any criminal charges in connection with the case, which was announced in spring 2013.

The ruling is a setback for ENRC, which has been haunted by the SFO investigation for seven years. Once a darling of London investors with mines in Africa and Kazakhstan, its share price plummeted, prompting its  owners to take it private again and to move its assets into another  company.

ENRC has launched a number of lawsuits, including against its  former lawyer Neil Gerrard, in an attempt to show that the probe is  riddled with impropriety. The SFO denies any wrongdoing. As does  Gerrard, who has since filed a harassment claim against ENRC for  allegedly instructing private intelligence operatives to spy on him.

The SFO has resisted the suits, but has yet to decide on whether to bring charges. Its probe focuses on whether ENRC officials paid bribes to obtain valuable copper and cobalt assets in Democratic Republic of Congo, one of the poorest countries in the world.

At the heart of the case is the relationship between ENRC and Israeli businessman Dan Gertler, a close friend of the former president of Congo. He denies any wrongdoing.

In Tuesday’s case, lawyers for ENRC said the SFO acted unlawfully by halting an independent review by a retired judge. His probe was looking into ENRC’s claims that Gerrard had colluded with the SFO in the hope that a wide investigation would mean he could charge higher fees, and that the SFO was in possession of legally privileged documents. A lawyer for the SFO said that the prosecutor stopped the review because ENRC  sued the agency in March for $93 million to cover its legal fees, and the SFO didn’t want to burden its staff with multiple reviews.

When offered a stay in the March proceedings, ENRC declined and only  later agreed to entertain the idea if the review’s scope was widened, Supperstone said.

“I am unable to conclude that the reasons put forward by the SFO for halting the review in the light of the misfeasance proceedings are even arguably irrational,” Supperstone said. The judge also said he didn’t believe that the SFO would bring charges if there was a prospect that the alleged mpropriety would result in a successful legal challenge. “I cannot accept what I believe to be the claimant’s submission that a charging decision would be waived on in the face of any impropriety,” he said.

ENRC said it’s considering an appeal to the decision and believes that the court has confirmed that “the SFO must properly take account of the  very serious concerns ENRC has raised” when it takes further steps in its investigation, according to a statement.

 

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