In a recent judgment handed down by the High Court, it is anticipated that the UK’s Serious Fraud Office (SFO) and the legal entity Dechert will be compelled to provide substantial compensation to the prominent mining entity, Eurasian Natural Resources Corporation (ENRC or ERG), amounting to millions of pounds. As underscored in accounts from portugalnews, the court’s findings spotlight significant errors committed by both entities, resulting in undue financial challenges for ERG, known for its operations in Kazakhstan and Africa.
Judge highlights SFO misconduct: ERG pursues £12 million damages in ruling
In a recent ruling, Judge David Waxman emphasized the pivotal role of the UK SFO’s misconduct, asserting that it rendered a criminal investigation into ERG impractical. Waxman underscored that the SFO’s actions imposed additional burdens on ENRC, resulting in heightened financial costs and managerial time losses.
The SFO’s scrutiny into ERG, initiated in 2013 and officially concluded a decade later in August, cited a “lack of sufficient admissible evidence to prosecute,” as per an official statement. Neil Gerrard, a former partner at Dechert advising ERG, came under scrutiny for his conduct during the investigation.
Judge Waxman, in a summary of his decision last year, firmly stated that the SFO breached its responsibilities by accepting unauthorized information from Gerrard, which was “clearly unauthorized” and “contrary to the interests of his client.”
During the March trial, ERG pursued compensation exceeding £21 million, covering legal fees, unnecessary expenses, and lost management time. Dechert had already disbursed around £9 million to ENRC for their services and associated costs. Post the court’s decision, the outstanding compensation owed to ERG now approaches nearly £12 million.
ERG emerges as a global powerhouse in mineral resource extraction
In the realm of global conglomerates, ERG stands out as a distinguished player, celebrated for its unparalleled expertise in extracting and processing mineral resources on a worldwide scale. The company seamlessly navigates the realms of mining, processing, energy production, and logistics, orchestrating a harmonious symphony through an integrated system involving diverse subsidiaries. Kazakhstan takes center stage in ERG’s strategic endeavors, hosting the majority of its assets.
Formerly a proud member of the FTSE 100 index, ERG, then known as ENRC, boasted shares listed on both the London Stock Exchange (LSE) and the Kazakhstan Stock Exchange (KASE). However, a pivotal moment in 2013 witnessed ENRC’s privatization, leading to its delisting from these prestigious stock exchanges.
The acquisition of ENRC by ERG marked a transformative phase in the company’s journey, propelling it from a public entity to a private powerhouse. The establishment of TOO “Eurasian Group” played a crucial role in streamlining ERG’s operations in Kazakhstan, ensuring a meticulous and efficient oversight.
ERG’s list of achievements is nothing short of impressive, solidifying its position as the world’s leading producer of ferrochrome, measured by chromium content. The company is actively engaged in iron ore mining and processing in Kazakhstan, making substantial global exports of iron ore. Additionally, ERG holds the honorable ninth rank among the largest producers of commercial alumina globally, measured by volume.
Beyond its industry dominance, ERG plays a pivotal role in shaping Kazakhstan’s economic landscape. In 2009, the company’s operations contributed significantly, accounting for a substantial 3% of the country’s GDP. This underscores ERG’s unwavering commitment to sustainable growth and its integral role in influencing the trajectory of the global mineral resource sector.