UK Forces ENRC to Hand Over Kazakhstan and Africa Documents to Investigator

Kazakhgate or Diamondgate? The Evidence So Far

A U.K. judge ordered Eurasian Natural Resources Corp. (ENRC) hand over to criminal investigators documents the company claims are subject to legal privilege, Bloomberg reported Tuesday.

The U.K.’s Serious Fraud Office (SFO) has been investigating ENRC since 2013 over allegations that bribes were paid to win business relating to the acquisition of mineral assets in Kazakhstan and Africa.

The mineral company has since changed its name to ERG and delisted from the London Stock Exchange.

The company refused to surrender some of the files investigators wanted to see, claiming they were subject to legal privilege – a form of protection from disclosure of confidential information exchanged between a client and lawyer.

The London judge ruled Monday that most of the files sought by the SFO were not subject to legal privilege.

The ruling reveals new details about the investigation, such as a 2011 e-mail from the ENRC’s head of compliance.

“I predict … a SFO dawn raid before summer’s over. The companies’ books and records will be a first port of call,” read the e-mail, sent after allegations of fraud at one of ENRC’s subsidiaries.

The judgment is a triumph for the SFO, which has faced a number of challenges over legal privilege restriction over the years but never had the matter resolved by a court until now.

“There is a recognized public interest in the SFO being able to go about its business of investigating and prosecuting crime,” Judge Geraldine Andrews said in her ruling.

ENRC denies it has committed any criminal offense and hopes to appeal. So far nobody has been charged or prosecuted.

Patokh Chodiev is a London-based Uzbek oligarch with Belgian citizenship who, with Alexander Mashkevich and Alijan Ibragimov, is part of the “Trio,” a group of Central Asian businessmen who made their fortune through deals in minerals, oil, gas, and banking in Kazakhstan.

Chodiev is quoted in the case of Panama Papers. According to the newspaper Le Soir, it would be linked to at least twenty-five offshore companies.

Belgian Laws Changed by Major Bank to Avoid Bankruptcy

Two of his associates, Alexander Machkevitch and Alijan Ibragimov, are also covered by the case. All three had been involved in the case of the first and second “Kazakhgate”. In 2011 they entered into a plea agreement (€ 23 million) with the Belgian court for abandoning prosecutions.

The scandal surrounding mining group ENRC is one of the worst to have ever hit the City, The DailyMail reported.  Since leaving London three years ago, ENRC has moved its HQ to Luxembourg and renamed itself Eurasian Resources Group, or ERG.

Recall that the driver of the shake-up is the Kazakh government, which was deeply embarrassed by the storm of negative publicity around ENRC and now holds a 40 per cent stake in ERG, with Bakhyt Sultanov, sitting on the board.