Exclusive: ENRC turns up heat in media leaks claim against City grandee leaking
Sir Paul Judge ‘repeatedly met journalist to disclose board secrets’
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Tuesday 25 March 2014
The bitter legal fight between the scandal-struck Kazakh mining giant ENRC and its former director, the City grandee Sir Paul Judge, just got juicier.
To recap: Sir Paul, a sheriff of the City of London, stands accused by the company of leaking damaging information about it to a person who described himself as a journalist, at a time when the former FTSE 100 company was in crisis during 2011.
ENRC, which in November last year quit the London Stock Exchange as a byword in poor corporate governance, sued Sir Paul over the alleged leaks last July. Sir Paul denies the allegations, and has countersued. He claims he knew the person he spoke to was not a journalist but someone acting on behalf of ENRC or people associated with it, in an attempt to “entrap” him.
Today, The Independent can reveal the astonishing list of alleged “leaks” to the media that ENRC claims Sir Paul made, including the allegation that among ENRC’s dubious-looking practices was the funding of a $40,000 (£24,000) a year university scholarship in the US for the son of a Kazakhstan police chief.
The list appears in the latest court filing from ENRC. In the leaks to the supposed “journalist” Sir Paul allegedly revealed:
* That there were allegations of “corrupt procurement and supply” to ENRC’s Kazakh division called the Sokolov-Sarbai Mining Production Association (the same ENRC arm alleged to have paid for the policeman’s son’s scholarship in the US).
* That Sokolov-Sarbai employees and equipment were allegedly working at a farm connected to one of the shareholder-oligarchs at ENRC.
* That Randal Barker, ENRC’s general counsel, resigned after being shouted at by the then-chief executive Felix Vulis.
* That another director, Mehmet Dalman, who became chairman, was “not independent” because he ran investment funds for the oligarchs who were the biggest shareholders in ENRC.
* That Neil Gerrard, a British lawyer working for Dechert solicitors, had been obstructed in his investigation of ENRC’s alleged corruption – despite having been hired by the company. The interference cited allegedly included the “moving of offices, falsification of documents, blocking of computers and deletion of data”.
* That a firm of headhunters, Korn/Ferry International, had issued a report counselling the board against hiring a non-executive director called Terence Wilkinson. ENRC says Sir Paul told the “journalist” this was because Mr Wilkinson had a conflict of interest: Mr Wilkinson was also employed at a US company where Glencore, a potential bidder for ENRC assets, was the major shareholder.
* That the government of Kazakhstan was trying to “set up the controlling shareholder of ENRC, Alexander Mashkevich, for a fall”. Sir Paul allegedly said he learnt this from the former BAE boss Sir Richard Evans, who was on the board of the Kazakh sovereign wealth fund.
* That Sir Paul was trying to block Mr Mashkevich’s campaign to become chairman of ENRC.
* That the Kazakh government was embarrassed at the removal from the board of non-executive directors Sir Richard Sykes and Ken Olisa.
ENRC claims that, following one of the meetings at which much of this was discussed, the supposed journalist emailed Sir Paul to thank him for “the breaking news material”, adding that he had filed “a solid story, with the source protections on which we’ve agreed”.
Sir Paul’s most recent statement to the court was that he deliberately spoke to the “journalist” in a sort of double bluff. He claims he knew the person was actually acting on behalf of ENRC or those associated with it, and that he knew the reports of their meetings would get back to ENRC. Then, he hoped, someone within the company might “inform the authorities”.
ENRC’s riposte to that in its latest document is the allegation that the “journalist” emailed Sir Paul describing himself as “the longest serving foreign correspondent in Russia”, and claiming to be accredited to the Business Day newspaper in Johannesburg as well as reporting on mining and business for the media in London, Hong Kong New York and Moscow. The claim alleges the “journalist” had said he hoped their meeting would “initiate coverage”.
The claim says “despite being a extremely busy man, Judge readily agreed to meet the journalist”. They met on five occasions for several hours, had one phone conversation and email correspondence, the claim alleges.
The ENRC turmoil became one of the biggest earners for London’s private investigation companies for years, with several leading corporate intelligence consultancies being recruited by various parties.
Corruption allegations first erupted when it emerged that ENRC had bought mining assets in the Democratic Republic of Congo which had been stripped by the government there from another London-listed mining company, First Quantum. The concessions had been sold, allegedly for a lowball price, to the Israeli mining billionaire Dan Gertler, a personal friend of the country’s President. Mr Gertler then sold the assets on to ENRC for an allegedly vast profit. First Quantum took legal action against ENRC, which paid it $1.25bn in a settlement.
Boardroom spats exploded as the central Asian oligarchs behind the company fell into dispute with the directors. Two directors, Mr Olisa and Sir Richard Sykes, were voted off the board, with Mr Olisa famously describing ENRC as “more Soviet than City”.
Other allegations of corruption in Kazakhstan destabilised the company further, leading to numerous boardroom scraps – one of which, according to ENRC, saw Sir Paul allegedly battling to become chairman. Sir Paul vehemently denies any such desire.
In the end, the Serious Fraud Office launched an investigation, helped by the findings of the inquiry by Dechert. This is thought to still be ongoing, although anti-corruption NGOs have cited concerns about whether those probes will be kicked into the long grass following ENRC’s departure from the Stock Exchange. This it did late last year, with the oligarch shareholders buying out minority investors.
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