LONDON – A UK 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 (SFO) 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, 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 impropriety 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 waved 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.