The controversial London flotation of Eurasian Natural Resources Corporation in 2007 faced an 11th hour hurdle after lawyers and auditors found evidence that financial records at the Kazakhstan-based miner had been falsified or destroyed, according to people familiar with the matter.

At least one director of the FTSE 100 company was so concerned about the revelations that they considered whether the initial public offering should be put on hold, one person familiar with the matter said.

Another person involved with ENRC at the time added: “There was a question over whether we should go ahead.”

The Kazakh miner is now the subject of a criminal investigation by the Serious Fraud Office, primarily over whistleblowing allegations made since then amid criticism of the standards of London listing rules.

A few weeks before its December 7 2007 float, ENRC received a report commissioned from Herbert Smith into a network of sales intermediaries in Russia. This set out evidence the law firm said was uncovered by PwC, ENRC’s auditors, of the falsification of audit data in Russia and the destruction of records relating to cash payments to the three Central Asian oligarchs who still have big stakes in ENRC.

An adviser involved with ENRC at the time of the listing said the problems with Russian trading were considered by UK Listing Authority while vetting the oligarchs – Alexander Mashkevich, Patokh Chodiev and Alijan Ibragimov – as directors of the company. He said this had been seen as a last-minute hitch to the deal.

“They [the UKLA] saw a lot of red flags,” he said. The other person familiar with the float said: “[Directors] were told by PwC and the banks that there might be a problem.”

The Herbert Smith report, part of which has been seen by the FT, stated that Russian sales intermediaries sold $870m of minerals in 2004-2006. It said sales agents collected part of each payment in cash to pass on to the three oligarchs who still have big stakes in ENRC. An employee who collected this money first told Herbert Smith investigators that he had destroyed related records, and later that he had kept none.

On the issue of audit data, the law firm stated that confirmations of sales figures sent to PwC, supposedly from 32 different businesses, all arrived on the same day, bearing addresses written in the same handwriting and having all been posted at roughly the same time in Moscow.

According to the report, PwC contacted two purchasers of ENRC commodities that had purportedly sent audit confirmations for 2006. Neither knew anything about it, Herbert Smith concluded.

Moreover, large volumes of data were wiped from computers in the Moscow office of ENRC, states the report, dated September 25 2007. According to one named witness, a manager “asked employees to leave their computers switched on . . . so that information could be deleted due to the impending IPO”.

This week, ENRC said the Russian sales network was “thoroughly investigated prior to the IPO, the investigation was closed and all allegations of wrongdoing were dismissed”.

Deutsche Bank, which advised the company on the float, Herbert Smith, PwC and the UK Listings Authority all declined to comment.

Herbert Smith found no evidence that ENRC or its management knew about the false audit confirmations or to suggest that, excepting one named employee, “reliance [could] not be placed upon the representations for audit purposes of current management”.

The flotation went ahead after PwC signed off financial data in the prospectus as “true and fair”. The “historic” Russian sales system is described in detail on page 16, among other “risk factors”. The falsification of audit confirmations is disclosed separately in a single paragraph on page 217 in “Part XIII: Additional Information”, which also states “much” of the deleted data were recovered.

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