UK SFO and Dechert could pay millions of pounds to ERG due to mistakes and collusion – court decision

By admin On Jan 8, 2024

The UK Serious Fraud Office (SFO), which allegedly colluded with law firm Dechert, could potentially pay millions of pounds to mining corporation Eurasian Resources Group(ERG) following a High Court ruling. This was reported by portugalnews. The court found that serious errors on both sides led to unnecessary financial costs for the metallurgical giant.

In his decision, Judge David Waxman emphasized that without the SFO’s misconduct, the criminal investigation into ERG would never have been opened. According to Waxman, the result of the SFO’s actions was an extra burden on ENRC, which led to financial costs and loss of management time.

For reference. Eurasian Resources Group (ERG) is an international conglomerate and a prominent player in the global mineral resource extraction and processing sector. The company operates with integrated capabilities, encompassing mining, processing, energy production, and logistics. The majority of its assets are located in Kazakhstan. ERG was formerly known as Eurasian Natural Resources Corporation (ENRC) and was once listed on the FTSE 100 index with its shares traded on the London Stock Exchange (LSE) and the Kazakhstan Stock Exchange (KASE).

ERG holds the distinction of being the world’s largest producer of ferrochrome in terms of chromium content, the largest iron ore mining and processing enterprise in Kazakhstan, and one of the world’s major iron ore exporters. Additionally, it ranks as the ninth-largest global producer of industrial alumina by volume.

ERG significantly contributes to the economic development of Kazakhstan, with its operations accounting for approximately 3% of the country’s GDP in 2009.

The SFO investigation into ERG began in 2013 and was closed ten years later in August. The reason for the closure was “insufficient admissible evidence for prosecution,” according to the SFO.

The investigation raised questions about the actions of Neil Gerrard, a former partner at law firm Dechert who was appointed to advise ERG.

Summing up his judgment last year, Judge Waxman said the SFO had breached its duties. This was that the service accepted information from Gerrard that was “manifestly unauthorized” and “contrary to the interests of his client.”

ERG sought more than £21 million in compensation for legal fees and unnecessary expenses, as well as lost management time, during the trial in March.

Law firm Dechert has already paid ERG around £9 million for work and expenses. This means the total amount ERG has not received is almost £12 million, according to the court’s decision.

portugalnews