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FCPA Blog Daily News

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Friday
Apr262013

Mining sector investigations spread to U.K.

The U.K. Serious Fraud Office said Thursday it has launched a criminal investigation of London-listed mining company ENRC plc.

'The focus of the investigation will be allegations of fraud, bribery and corruption relating to the activities of the company or its subsidiaries in Kazakhstan and Africa,' the SFO said in a statement.

The Guardian reported that the probe of ENRC -- the Eurasian Natural Resources Corporation, a FTSE 100 company -- was first triggered by a whistleblower.

The chairman of the company, Mehmet Dalman, and the law firm helping him investigate the whistleblower allegations, both resigned this week, the Guardian said.

Three founders of the company who control 44% of the company were considering taking the company private.

'The possible takeover is thought to have persuaded the SFO to launch an inquiry while the company is still listed in London,' the Guardian said.

The founders were identified as Alexander Machkevitch, Patokh Chodiev, and Alijan Ibragimov.

Another mining company with operations in Africa has been named in an overseas bribery investigation underway in the U.S.

The DOJ said earlier month that a grand jury is investigating whether BSG Resources -- the mining operation of Israeli billionaire Beny Steinmetz -- paid bribes to win mining rights in the Republic of Guinea.

A French citizen was arrested ten days ago in New York and charged with trying to obstruct the federal investigation into BSG.

Another Israeli tycoon with Africa mining operations has been tied to the U.K.'s ENRC.

The company's former partner in the Democratic Republic of Congo, Dan Gertier, has denied that his 'close relationship with the country's president, Joseph Kabila, allowed him to buy interests in the country's mining assets on the cheap,' the Guardian said.

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Our thanks to a reader who alerted us to the SFO's April 25, 2013 announcement.