ENRC Sues Ex-PM Of Kazakhstan In Widening War With SFO

Eurasian Natural Resources Corp. opened anoth­er front in its bat­tle with Britain’s Serious Fraud Office on Wednesday when it brought claims in a London court against the for­mer prime min­is­ter of Kazakhstan. 

Founders and largest share­hold­ers of ENRC Alijan Ibrahimov, Alexander Mashkevich, Patokh Shodiev.

The Kazak min­ing giant accused for­mer Prime Minister Akezhan Kazhegeldin of secur­ing con­fi­den­tial and priv­i­leged infor­ma­tion about ENRC and leak­ing it to the com­pa­ny’s “polit­i­cal and busi­ness adver­saries” — chief among them the SFO, which start­ed inves­ti­gat­ing ENRC in 2013 over alle­ga­tions of fraud, cor­rup­tion and bribery. 

On the pre­text of act­ing as the polit­i­cal oppo­si­tion in Kazakhstan, the defen­dant in fact act­ed (and con­tin­ues to act) to this day with the objec­tive, direct­ly or through inter­me­di­aries, of dis­sem­i­nat­ing such infor­ma­tion … with the goal of dam­ag­ing and desta­bil­is­ing the claimant,” accord­ing to the com­plaint. ENRC describes Kazhegeldin, who fled to London in 1998 after oppos­ing the recent­ly resigned first pres­i­dent of Kazakhstan, as the “focal point” in the spread of con­fi­den­tial ENRC infor­ma­tion through exchanges that took place in the U.K., U.S. and Kazakhstan since 2012. 

According to the suit, Kazhegeldin met in 2012 with a com­put­er foren­sics expert who’d con­tract­ed with ENRC from 2007 until 2011 for a num­ber of IT secu­ri­ty and foren­sic data col­lec­tion projects. In the course of his work with the ENRC, the expert pulled sub­stan­tial amounts of con­fi­den­tial infor­ma­tion from ENRC’s com­put­ers but ille­gal­ly retained it even after his work for the com­pa­ny was done, the ENRC claims. 

The com­plaint notes that the expert was super­vised on a 2011 inter­nal inves­ti­ga­tion by one of ENRC’s for­mer lawyers, Dechert LLP part­ner Neil Gerrard. In March, the min­er launched a £70 mil­lion ($87.4 mil­lion) law­suit accus­ing the SFO of induc­ing ENRC’s for­mer lawyers to share con­fi­den­tial infor­ma­tion on its busi­ness deal­ings in Kazakhstan and Africa, and specif­i­cal­ly alleg­ing that Gerrard leaked con­fi­den­tial legal memos. 

The SFO suit came after the min­ing com­pa­ny won a land­mark legal bat­tle against the SFO in September, when the Court of Appeal ruled that the SFO could not review doc­u­ments and advice that its for­mer lawyers pro­vid­ed to ENRC before the agen­cy’s probe. 

Sometime in 2012 and 2013, Kazhegeldin alleged­ly asked the com­put­er foren­sic expert to access his copied ENRC data and pull doc­u­ments that would then be turned over to an unnamed client in exchange for a $50,000 pay­ment, with $40,000 going to the expert and the rest land­ing with Kazhegeldin. 

The com­plaint fur­ther alleges that Kazhegeldin obtained con­fi­den­tial infor­ma­tion from British jour­nal­ist Mark Hollingsworth around the same !me peri­od. At the end of June, the ENRC claimed in a Maryland fed­er­al court that Hollingsworth recent­ly admit­ted that a September 2017 arti­cle he wrote about ENRC was sourced from a for­mer news­pa­per edi­tor, Phillip van Niekerk, who the ENRC in turn alleges to have been tipped off by the SFO. 

According to Wednesday’s suit, Hollingsworth obtained high­ly detailed infor­ma­tion about the SFO inves­ti­ga­tion as ear­ly as 2012, and giv­en Kazhegeldin’s “sub­stan­tial inter­est” in the SFO inves­ti­ga­tion as well as the tim­ing of cer­tain meet­ings between Hollingsworth and Kazhegeldin, the ENRC infers that the pair were shar­ing con­fi­den­tial infor­ma­tion about the investigation. 

The ENRC claims that priv­i­leged infor­ma­tion col­lect­ed by Kazhegeldin has been dis­sem­i­nat­ed to the min­er’s lit­i­ga­tion oppo­nents, Kazhegeldin’s con­tacts with­in the Kazak gov­ern­ment and the SFO. The com­pa­ny alleges that Kazhegeldin helped incite the U.K.‘s top white col­lar cop to pur­sue its probe into the ENRC. 

The min­er is seek­ing dam­ages for the mis­use of the infor­ma­tion and for Kazhegeldin to be barred from dis­clos­ing it any fur­ther. It fur­ther seeks an account­ing of the con­fi­den­tial infor­ma­tion that the for­mer prime min­is­ter dis­sem­i­nat­ed and con­fir­ma­tion that the infor­ma­tion has been deleted. 

The impli­ca­tion of Kazakhstan’s for­mer prime min­is­ter only widens the con­flict between the ENRC and the SFO. The white-col­lar crime agency has been inves­ti­gat­ing the ENRC since 2013 over its activ­i­ties in the Democratic Republic of Congo and Kazakhstan, but the ENRC has called for a judi­cial inves­ti­ga­tion into the agen­cy’s han­dling of the probe. 

The min­er’s law­suit against the SFO prompt­ed the agency to pause an inde­pen­dent inquiry into its ENRC inves­ti­ga­tion, though the com­pa­ny has since demand­ed that it be restarted. 

HM Crown Prosecution Inspectorate, the U.K.‘s pros­e­cu­tion over­sight body, released a report on Monday deeply crit­i­ciz­ing the SFO, say­ing its focus on deliv­er­ing case­work has led to a cul­ture that has cre­at­ed a “tol­er­ance of neglect­ful approach­es to man­age­ment” or in some cas­es “of unac­cept­able behaviors.” 

Counsel for the ENRC and rep­re­sen­ta­tives for the Serious Fraud Office did not imme­di­ate­ly respond to a request for com­ment Wednesday evening. Contact infor­ma­tion for Kazhegeldin was not avail­able. ENRC is rep­re­sent­ed by Justin Michaelson of Fried Frank Harris Shriver & Jacobson LLP. 

Counsel infor­ma­tion for Kazhegeldin was­n’t imme­di­ate­ly available. 

The case is Eurasian Natural Resources Corp. Ltd. v. Ake-Jean Qajygeldin f.k.a. Akezhan Kazhegeldin, case num­ber BL-2019–001337, in the High Court of Justice of England and Wales. 

Author: By Dean Seal
Additional report­ing by Christopher Crosby.
Editing by Michael Watanabe.