Serious Fraud Office continues probe into ENRC

The UK’s Serious Fraud Office announced that it had launched a criminal investigation into “allegations of fraud, bribery and corruption relating to the activities of the company or its subsidiaries in Kazakhstan and Africa” in April, officially signalling that it was no longer content to accept ENRC’s own account of its affairs.

ENRC had, up until that point, entered into a “self-report” process, commissioning Dechert, the law firm, to undertake an independent investigation into alleged wrongdoing. The findings would then be 
presented to the SFO.

While Dechert’s report into the company’s dealings in Kazakhstan was submitted, a second report into Africa was not because ENRC fired the law firm two weeks before it was due.

Just over a week later, the SFO issued Dechert with a so-called Section 2a notice in relation to its former client. Such notices are used when the SFO has a suspicion that overseas corruption has taken place. They 
demand the delivery of documents or individuals for interview, and allow the SFO to search premises, although material that has the protection of legal privilege – namely, in this case, any “self-report” written by  Dechert – cannot be turned over.

ENRC hired a new legal team including Debevoise & Plimpton, Fulcrum Chambers and Grosvenor Law.

The cash-strapped SFO has not made public the extent of its investigation into the company, and declined to comment on developments. Privately, it has mooted sending a team of investigators to the 
Democratic Republic of Congo on a fact-finding mission, although that has not yet happened, according to people familiar with the investigation.

It has interviewed witnesses including Sir Paul Judge, according to court documents filed as part of a lawsuit between the company and Sir Paul.

The SFO’s lead lawyer on the team has also, meanwhile, been occupied with a separate case in which a jury trial began this month.

Potentially a bigger problem for the company could be the involvement of the US authorities, which can make use of the sweeping US Foreign Corrupt Practices Act and sanctions legislation if a company or 
individuals have a link to the US. Both corporate fines and potential jail terms are higher compared with the UK.

Felix Vulis, the current chief executive, and Victor Hanna, who headed its African operations at the time of the alleged wrongdoing, hold US passports. Both have instructed US law firms, although neither faces any formal allegations.