The Serious Fraud Office (SFO) in the United Kingdom is likely to face the obligation of reimbursing either Eurasian Natural Resources Corporation (ENRC) or Eurasian Resources Group (ERG) as a result of an ongoing criminal investigation.
For context, Eurasian Resources Group (ERG) stands as a prominent international conglomerate deeply involved in the global extraction and processing of mineral resources. The company operates across various facets, including mining, processing, energy production, and logistics, with the majority of its assets situated in Kazakhstan. ERG, formerly known as Eurasian Natural Resources Corporation (ENRC), was previously listed on the FTSE 100 index, trading shares on both the London Stock Exchange (LSE) and the Kazakhstan Stock Exchange (KASE).
ERG boasts the title of the world’s largest producer of ferrochrome concerning chromium content, holds the position as the largest entity in iron ore mining and processing in Kazakhstan, and stands as one of the major global exporters of iron ore. Furthermore, it secures the ninth position among the world’s largest producers of industrial alumina by volume. The economic significance of ERG to Kazakhstan is noteworthy, as the company’s operations contributed to approximately 3% of the country’s GDP in 2009.
In August of this year, the SFO concluded a decade-long investigation into ERG but revealed insufficient compelling evidence for court use. This led to complications for ERG, incurring financial costs and consuming managerial resources, as highlighted by London High Court Judge David Waxman on Thursday. The court determined that the SFO’s “misconduct” was crucial for the prosecution’s feasibility, potentially making ERG eligible for multi-million pound compensation, as reported by portugalnews.
ERG had terminated its association with the law firm Dechert by spring 2013, paying around £13 million (approximately $16.5 million) for legal services. Later, the firm was refunded nearly £9 million of this sum.
The mining giant, operating in Kazakhstan and various African nations, previously took legal action against the SFO, alleging illegal conduct during the corruption investigation. ERG claimed collusion between Neil Gerrard, a former partner at Dechert LLP hired for an internal investigation in 2010, and the SFO. Subsequently, ERG accused Gerrard of exploiting confidential information for personal gain and passing it to the SFO to escalate the investigation, ultimately profiting from heightened legal costs.
As of December 21, a representative for Gerrard declined to comment, according to the Wall Street Journal. In previous statements, Gerrard maintained that his actions were within legal bounds.