UK’s SFO calls time on ENRC and Rio Tinto probes
Fraud watchdog closes decade-long investigation into Kazakh miner ENRC citing “insufficient admissible evidence to prosecute”
The UK’s Serious Fraud Office (SFO) has closed two high-profile corruption probes, into Kazakh mining group Eurasian Natural Resources Corporation (ENRC) and Anglo-Australian mining giant Rio Tinto.
The SFO updated its website Thursday (24 August) with a notice that it had closed the investigation it launched into ENRC in 2013 after a review concluded there was “insufficient admissible evidence to prosecute”.
The decision ends the long-running investigation of ENRC that focused on suspected payment of bribes by the company to secure access to lucrative mining contracts in the Democratic Republic of the Congo between 2009 and 2012. The case led to subsequent extensive satellite litigation involving now-retired Dechert partner Neil Gerrard, as ENRC’s then legal adviser, over legal professional privilege, the handling of evidence and alleged unauthorised contact between prosecutors and former advisers Dechert.
Professional negligence claims were brought against Gerrard and Dechert, which were contested by both. An extensive judgement in May 2022 found Gerrard had been negligent.
ENRC, which has consistently denied wrongdoing, also sued the SFO in the High Court in 2021 alleging misfeasance in public office and inducing breach of contract, instructing Michael Roberts of Hogan Lovells and a counsel team led by Nathan Pillow KC of Essex Court.
Those proceedings, which the SFO contested, are continuing, with the trial judge Mr Justice Waksman dismissing most, but not all, of the claims made against the SFO in the same ruling finding against Gerrard in 2022. The remaining litigation will return to court at a date to be determined.
An SFO source told The Guardian the litigation had not influenced its decision to drop the investigation.
An ENRC spokesman said: “ENRC is pleased that the SFO has finally closed its investigation and that the SFO is taking no further action in respect of this matter.”
Elizabeth Robertson, a partner at Skadden Arps Slate Meagher & Flom, said that the decisions illustrated a broader point about resourcing business crime cases.
“When a government agency lacks resources, it inevitably results in delays and therefore makes cases nigh impossible to prosecute. This could be seen as an apparent breach of the UK’s treaty obligations to provide sufficient resources to prosecute,” she said.
The SFO also updated its website Thursday (24 August) with a notice that it had dropped an investigation opened in 2017 into alleged corruption by Rio Tinto in the Republic of Guinea, which was firmly denied by the company.
“We concluded that it is not in the public interest to proceed with a prosecution in the UK,” the SFO said in the update, though it said it would continue to assist the Australian Federal Police’s investigation into the matter.
The decisions come as the SFO’s director, Liso Osofsky, prepares to hand over the reins in September to former Metropolitan police chief Nick Ephgrave at the end of her five-year term.
David Rundle, a white-collar crime partner at Bryan Cave Leighton Paisner, said that Osofsky was the right person to have concluded there was insufficient evidence to prosecute, but noted the delays in making that decision.
He added: “One must ask if the evidential landscape on which these decisions were based has been known for some time. If so, more time and energy had been diverted along the way.”
Meantime Quinn Emmanuel Urquhart & Sullivan partner, Justin Michaelson, whose firm acted for ENRC in the criminal proceedings, called the decision “brave and right”, asking on LinkedIn: “Why did it take so long?”