Fraud office ‘acted in bad faith’ in Kazakh miner case
Officials at the SFO were in ‘serious breach’ of their duties during inquiry into ENRC, rules High Court
‘The allegations against both sets of defendants [the SFO and Neil Gerrard] are of the most serious kind’
SENIOR officials at the Serious Fraud Office (SFO) were in “serious breach” of their duties during an investigation into a Kazakh mining company, according to a High Court ruling that piles fresh pressure on the embattled agency.
Judge David Waksman found that Neil Gerrard, a former partner at City law firm Dechert, leaked material about his then-client ENRC to the SFO in breach of his own duty of care.
The Kazakh miner hired Mr Gerrard in 2011 to investigate corruption allegations at the company, but later accused him of handing documents to the antifraud agency to help prosecutors expand their investigation into the miner and boost his legal fees.
The ruling said that former senior SFO officials induced Mr Gerrard to act against his client’s interests in what the judge concluded was an act of “bad faith opportunism” on the part of the whitecollar crime agency.
The judgment will come as a further blow to the SFO, which is under investigation for “serious failures” in a separate case that led to the quashing of bribery convictions.
The Court of Appeal overturned convictions of former oil and gas executives following backroom talks Lisa Osofsky, director of the SFO, held with a “fixer”. The ENRC allegations precede Ms Osofsky’s time at the SFO.
In the ENRC case, the judge said: “The allegations against both sets of defendants are of the most serious kind.”
Judge Waksman found that Mr Gerrard engaged with the SFO without authority and that former senior SFO officials, including then-director Richard Alderman, communicated with him when they should not have.
However, allegations of misfeasance in public office, brought by ENRC against the SFO, failed.
ENRC kicked off proceedings against the SFO after the agency launched a criminal investigation into the miner over allegations of fraud, bribery and corruption. No charges have been brought against ENRC. The SFO’S investigation is ongoing.
A spokesman for the SFO said: “We welcome that the judge found against ENRC for the majority of its allegations against the SFO. We are considering the implications of this lengthy and complex judgment for the SFO and other law enforcement authorities.”
A spokesman for Dechert said: “We recognise fully the seriousness of the judge’s findings in relation to Mr Gerrard’s conduct. We are considering the judgment to see what we should learn from it.”
A spokesman for ENRC said: “As much as ENRC welcomes today’s judgment, it is also profoundly concerned by the very serious implications for other Dechert clients and other subjects of SFO investigations.”