The UK’s Serious Financial Fraud Office (SFO) together with law firm Dechert forced to reimburse the expenses of the giant Eurasian Resources Group (ERG). The corporation suffered them in connection with a lengthy criminal case. In August 2023, the SFO concluded its ten-year investigation into ERG. The SFO announced that it did not have enough convincing evidence to use in court.
The claim brought by the SFO forced ERG to face a series of proceedings that entailed significant financial costs and wasted management time. This information was presented by London High Court Judge, David Waxman. The court concluded that without the SFO’s unlawful conduct the criminal investigation would have been unfounded. According to the novinite, the court ruled that ERG’s potential damages to the SFO and its associates could be in the tens of millions of pounds.
What does ERG do?Eurasian Resources Group (ERG) is an international corporation, a major participant in the global mining and processing of mineral resources. The company operates with integrated capabilities including mining, processing, energy generation and logistics. In addition, ERG is the world’s largest ferrochrome producer by chromium content, the largest iron ore mining and processing company in Kazakhstan and one of the world’s leading iron ore exporters. The company ranks ninth in the world in terms of industrial alumina production.
The bulk of the company’s assets are located in Kazakhstan. It was previously known as Eurasian Natural Resources Corporation (ENRC).
Litigation: SFO, Dechert and ERG in the fight for compensation and defeat of illegal investigation
The SFO opened an investigation into ERG in 2013, but ten years later, in August 2023, it was closed. The reason for this was that the SFO declared that there was insufficient evidence for a criminal investigation.
These lengthy proceedings have raised serious questions about the actions of Neil Gerrard, a former partner at law firm Dechert who was appointed to advise ERG.
Summing up his decision last year, Judge Waxman stressed that the SFO had breached its duties. The breach involved the SFO accepting information from Gerrard that was “manifestly unauthorized” and “contrary to the interests of his client”. Corporation ERG brought Neil Gerrard into its team in 2010 to conduct an internal investigation into corrupt practices within the organization. However, laterERGcharged Gerrard with using confidential information he received for his own benefit and passing this information on to the SFO with the intention of expanding its investigation. This, in turn, could lead to increased legal costs. Neil Gerrard’s representative declined to comment, as reported by the Wall Street Journal on December 21, 2023. Despite the allegations, Gerrard has insisted the legality of his actions in previous statements.
As a result, ERG is seeking compensation in excess of £21 million for legal costs, unnecessary work, expenses and lost management time associated with the litigation.
Law firm Dechert has already paid around £9 million to ERG for work and expenses. This brings ERG’s total outstanding compensation to just under £12 million, according to the court’s decision.