Billionaire mining tycoons said the U.K.’s fraud prosecutor colluded with their own “bullying” lawyer to leak confidential information and manufacture grounds for a criminal probe that’s dragged on for almost a decade.
The 11-week London trial between Kazakh miner Eurasian Natural Resources Corp. and the Serious Fraud Office started Monday as the company seeks 70 million pounds ($99 million) from the prosecutor, and hundreds of millions more from its ex-lawyer Neil Gerrard for money it says it spent on legal fees for internal investigations and defense.
The trial marks the beginning of the end of a near decade-long fight that’s involved several lawsuits and an eight-year criminal investigation. The probe, one of the SFO’s longest, is focused on allegations of fraud, bribery and corruption around the acquisition of substantial mineral assets. The mining firm, owned by billionaires Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov, denies any wrongdoing. Ibragimov died earlier this year.
“This case centers around a former policeman turned high-flying white-collar crime solicitor, his reckless advice – and wholesale failures to advise – his remarkable modus operandi and Machiavellian conduct, and the stream of unlawful private dealings between him and his close contacts at the SFO,” Clare Montgomery, ENRC’s lawyer, said in court documents referring to Gerrard.
ENRC also accused Gerrard, a former Dechert lawyer, of being “motivated by greed” and “bullying” the firm into following his legal advice.
Gerrard and the SFO deny the accusations. Gerrard is filed a counter-suit against ENRC and a private intelligence firm it hired to allegedly harass the lawyer and his wife. Gerrard said that operatives followed him on a holiday to a private island in St. Lucia, installed a motion-trigger camera monitoring his home near London and spied on him during a lunch meeting close to his office. ENRC denies breaking the law.
“ENRC now regrets its choices and regrets sharing so much information with the SFO,” Simon Colton, the SFO’s lawyer, said in court documents. “Whether ENRC is justified or not in criticizing Dechert or Mr Gerrard for their advice, that regret cannot support a claim for deliberate or reckless wrongdoing,” against the SFO’s director.
ENRC declined to comment. Gerrard, Dechert and the SFO didn’t immediately respond to requests for comment.
Shares of ENRC, once among the 100 most-valuable companies on the London Stock Exchange, plummeted after the SFO probe was announced in 2013. The owners took the firm private and moved its mines into a separate company called Eurasian Resources Group, which isn’t under investigation.