Serious Fraud Office drops ENRC case after 10-year investigation

The UK’s Serious Fraud Office has dropped its ten-year-old investigation into the Kazakh mining company ENRC, drawing a line under the acrimonious case that tied up the SFO in legal wrangling.

The SFO said on Thursday it had “concluded that we have insufficient admissible evidence to prosecute,” and therefore closed the case against ENRC. No charges were brought against the company as a result of the investigation, which the agency previously said centred on allegations of “fraud, bribery and corruption around the acquisition of substantial mineral assets”.

The UK investigator also closed other unrelated cases on Thursday, including a corruption investigation against Rio Tinto and a probe into suspected pension fraud at Alpha and Green Park Companies.

The decisions are a blow to the SFO and come at a sensitive time for the agency whose director, Lisa Osofsky, is stepping down after completing her five-year term. Osofsky will leave by the end of September, to be succeeded by Nick Ephgrave, a former assistant commissioner in the Metropolitan Police.

Osofsky’s tenure has been marred by a number of failings in the SFO’s disclosure processes, which led to several criminal trials being abandoned. The ENRC case was first accepted for investigation by her predecessor, Sir David Green.

The investigation against ENRC, launched in April 2013, caused the mining group to crash out of the FTSE 100 and eventually go private. The probe centred on suspected payment of bribes to secure mining contracts in the Democratic Republic of Congo, home to some of the world’s richest stocks of copper and cobalt. The cash-strapped SFO received special government funding to pursue the probe.

In a years-long legal saga, ENRC sued the SFO over alleged misconduct in its investigation. The SFO was largely cleared of wrongdoing, although certain strands of that civil case are still making their way through the courts.

ENRC also sued the Financial Times and one of its former journalists for libel but withdrew those claims last year.

An SFO spokesman said the case closures reflect the agency’s new system for assessing the progress in its cases more regularly and more stringently, after recommendations from HM Crown Prosecution Service Inspectorate.

The case closures will also free up resources for the incoming director to pursue new investigations.

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.”

Also on Thursday, the SFO closed its investigation into Anglo-Australian mining company Rio Tinto and “suspected corruption” in the Republic of Guinea.

“We concluded that it is not in the public interest to proceed with a prosecution in the UK,” the SFO said on its website, noting that a live investigation was still continuing in Australia.

Rio Tinto said: “We are committed to conducting business to the highest standards of integrity.”

Letter in response to this report:
An idea for funding the UK’s Serious Fraud Office / From Leo Martin, Managing Director, GoodCorporation, London SW15, UK