The UK’s Serious Fraud Office (SFO) and the Kazakh mining company Eurasian Natural Resources Corporation have agreed a settlement to end one part of a years-long legal battle.
The agency had been investigating ENRC for suspected bribery and fraud in Africa and Kazakhstan, which the mining company denied. But the SFO dropped its decade-long investigation last year without bringing charges, citing insufficient admissible evidence.
The SFO and the Kazakh mining group said in London’s high court on Tuesday that the case, which was due to go to trial this week, had been settled for an undisclosed amount.
The settlement is between ENRC, the SFO and two other defendants – former SFO prosecutor John Gibson, now a partner at the law firm Cohen & Gresser, and Tony Puddick, who is still a senior SFO investigator.
An SFO spokesperson said: “Throughout this case we robustly defended the claims. A confidential settlement has now been agreed.”
A spokesperson for ENRC said: “ENRC is pleased to report that a confidential settlement has been reached on the terms set out in the consent order.”
The dispute was about whether the prosecutor leaked information to the media during the corruption investigation into ENRC, which the SFO has denied.
ENRC, which floated on the London Stock Exchange in 2007, was founded in Kazakhstan in 1994 by three central Asian oligarchs known as the “Trio”; Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov. The latter died in 2021.
The parties did not disclose if any money will change hands. Even if the SFO has paid nothing – or indeed received a payout from ENRC – under the settlement, it still faces a big bill from the decade-long saga.
This stems from a previous high court ruling that the SFO breached its duties by accepting information that ENRC’s own lawyer, Neil Gerrard, handed over without his client’s permission. A trial, expected in late 2025 or early 2026, will decide how much UK taxpayers’ money should be paid to the oligarchs’ company in damages.
The SFO has set aside £238m to cover the damages – nearly three times its annual budget. ENRC is seeking £250m from the agency, Gerrard and the Kazakh firm’s former law firm Dechert.
While the legal claimant that has brought multiple UK proceedings against the SFO and others is London-registered ENRC, this company belongs to the oligarchs’ multinational group, headquartered in Luxembourg.
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This multinational – Eurasian Resources Group – has borrowed billions from Russian state-owned banks Sberbank and VTB, which the UK sanctioned after Vladimir Putin launched his full-scale invasion of Ukraine in 2022.
ENRC’s most recent accounts, published in September, said Eurasian Resources Group has “successfully completed restructuring of its credit facility agreements” with Sberbank and VTB “and expects to perform its payment obligations under existing financing arrangements in compliance with all applicable laws and regulations”. ENRC’s representative has said it has no direct debts to these banks.
With mines from Kazakhstan to Congo, ENRC was once one of the most valuable companies on the London Stock Exchange, worth £20bn at its peak.
In 2007, when it floated, captains of British business, two of them with knighthoods, were appointed to ENRC’s board. Soon, though, the oligarch founders were fighting the company’s directors for control of this vast mining empire. The scandal deepened when allegations emerged that the prized mines ENRC had taken over in Africa were won with bribes but no charges were ever brought.