High Court Backs SFO Access To ENRC Evidence
Miner under investigation by crime agency over activities in Kazakhstan and Africa.
Sensitive evidence detailing dealings by ENRC, the mining group that crashed out of the FTSE almost four years ago amid allegations of corruption, can be handed over to criminal investigators as part of a long running probe, the High Court in London has ruled.
A judge ordered that material generated during internal investigations by ENRC can be given to the UK’s Serious Fraud Office, which has been investigating the company since 2013 over its activities in Kazakhstan and Africa. ENRC denies it has committed any criminal offence warranting the probe and so far no person has been charged or prosecuted.
On Monday, Mrs Justice Andrews ruled broadly in favour of the SFO, which had launched a civil case against ENRC in an effort to access material that the company claimed was covered by legal professional privilege; that is, litigation privilege or legal advice privilege — or both.
Litigation privilege is a type of legal protection that keeps confidential any communication between a client and lawyer if litigation or adversarial proceedings have commenced or are anticipated. ENRC also argued that certain documents were covered by legal advice privilege, which protects advice given by lawyers to their clients.
The judge ruled that the bulk of the documents in issue were not covered by litigation privilege, meaning they could be obtained by the SFO. She also ruled that an investigation is not the same as adversarial litigation — civil or criminal proceedings.
The only exception was a key presentation made to the board in March 2013 by the law firm Dechert on its findings during an investigation into ENRC’s dealings in Africa, which Monday’s judgment said was covered by privilege. Dechert was fired two weeks after that presentation and the SFO launched a formal criminal probe soon after.
While the SFO received in February 2013 a report into whistleblower allegations of fraud at an ENRC subsidiary in Kazakhstan, it never received the company’s so-called “self-report” into corruption allegations in sub-Saharan Africa.
“The dominant purpose for which those documents were created was to enable reports to be prepared to show to the SFO and presentations to be made to the SFO, at a time when the relationship was collaborative rather than adversarial,” the judgment reads.
ENRC hopes to appeal. Graham Huntley, partner at Signature Litigation, which acted for ENRC, said: “This is the first case in which the court has had to consider whether litigation privilege is engaged in a criminal investigation involving the SFO. The effect of this decision is that it is much harder to claim litigation privilege in the criminal context than in a civil one.”
The ruling is a boon for the SFO as it tries to clarify its position on companies coming forward with information through the so-called self-reporting process and where, if appropriate, it can secure more US-style plea deals in which businesses typically pay fines but avoid prosecution.
Mrs Justice Andrews’ ruling gives new details about events leading up to the SFO’s formal investigation into ENRC — including its preparation for possible dawn raids by after the whistleblower reports.
The judge noted that in a witness statement to these proceedings, ENRC’s solicitor, Daniel Spendlove, said that in early 2011, ENRC was braced for a dawn raid by the SFO following allegations about its Kazakh unit.
As questions began to be raised by MPs in 2011 over the separate ENRC acquisition of Camrose, ENRC’s head of compliance at the time said in an internal email: “I predict a sh*tstorm and a SFO dawn raid before summer’s over. The companies’ books and records will be a first port of call,” according to the ruling.
by Caroline Binham and Jane Croft
This article was originally published on Financial Times. Read the original article.