© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: July 11, 2013 8:17 pm
Sir Paul Judge, the City grandee and former board member of Eurasian Natural Resources Corp, has been issued by the UK’s anti-fraud agency with a notice requiring him to answer questions and deliver documents that could assist it with its criminal investigation into the FTSE 100 mining company.
Sir Paul was one of several recipients of so-called Section 2 notices sent out recently by the Serious Fraud Office in a sign it is ratcheting up its criminal probe into ENRC that was first announced in April, said five people familiar with the investigation.
Section 2 notices can be used by the SFO to compel someone to answer questions, turn over documents, or to raid properties as part of criminal probes. The notices override any confidentiality clauses in employment contracts directors may have had.
Fulcrum Chambers, the company’s legal advisers, and Dechert, the law firm that was formerly carrying out independent investigations into the company’s business activities in Africa and Kazakhstan, are also recipients of similar notices, the people said. Other former board members over the past few years have also been invited for interview with the SFO, they added.
Sir Paul, who stepped down from ENRC’s board last month after six years of service and is not accused by the SFO of wrongdoing, voluntarily entered into the Section 2 process, three of the people said. His solicitor at Berwin Leighton Paisner declined to comment.
The SFO declined to comment.
Dechert was fired by ENRC at the end of March, just two weeks before its report was due to be turned over to the SFO into ENRC’s dealings in Africa, where it has bought assets in the Congo, Mozambique and Zambia. The law firm then received a similar pre-investigation notice in early April. That has now been rescinded and a new notice issued once the SFO announced a formal criminal probe.
The agency said at the time it would investigate “allegations of fraud, bribery and corruption relating to the activities of the company or its subsidiaries in Kazakhstan and Africa”.
The SFO’s activity comes as authorities elsewhere consider whether they should open their own investigations, even as the company is the subject of a bid approach by its three founder-shareholders. The turmoil at ENRC has also led to the scrutiny of stock market listing rules in the UK.
Felix Vulis, the company’s chief executive, and Victor Hanna, who headed its African operations at the time of the alleged wrongdoing, both hold US passports and both have retained US law firms – Wilmer Hale and Quinn Emanuel Urquhart & Sullivan respectively – should the Department of Justice begin to investigate. Neither individual has been contacted by the DoJ, said people familiar with the situation.
Meanwhile, the Zambian government summoned an ENRC consultant for crisis talks in late May following the SFO’s announcement of its probe, with a view to the African nation deciding whether to launch its own investigation into a $300m deal to purchase a Zambian copper asset, Chambishi Metals.
The Zambian ministries of mining and finance demanded answers following a leaked Dechert letter referring to information from a whistleblower that alleged cash payments had been made to African presidents in connection with the deal. The letter suggests further that a whistleblower had alleged that a senior executive had sanctioned the payments.
“They were very serious allegations,” said Amos Chanda, press secretary at the Zambian High Commission.
During the meeting, the consultant claimed the whistleblower had recanted his allegations, Mr Chanda said.
ENRC said: “We refute any allegations of bribery and corruption.” The company refused to comment further on the investigation.
With reporting by Caroline Binham, Jonathan Guthrie, Cynthia O’Murchu and Guy Chazan in London
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in