The Guardian: British authorities - powerless against illegal mining business

The Serious Fraud Office (SFO) and the British judiciary are protecting the illegal businesses of oligarchs from the former Soviet states in Asia who run the company Eurasian Natural Resources Corporation (ENRC), this is the conclusion of an investigation published yesterday by The Guardian newspaper, in which it is stated that the respective oligarchs allegedly bribed senior political officials in London to escape the charges they were facing.

The first questions about the activity of the London-listed company arose in 2016 when a South African private detective investigated, at the request of an American company, the death of geologist Andre Bekker. He was found charred on 28 October 2016 inside a white Audi Quattro on a street on the outskirts of Johannesburg. Following the investigation, the South African private detective found that Bekker had been murdered, and further investigation convinced him that the murder was linked to a suspicious mining deal involving one of the world's most powerful corporations: Eurasian Natural Resources Corporation.

• The Kongoni affair - the cover for the embezzlement of 295 million dollars

The Eurasian Natural Resources Corporation (ENRC) is a multinational mining company founded and controlled by a group of oligarchs known as the "Trio". ENRC at one point became one of the most valuable companies listed on the London Stock Exchange, with a market value of £20 billion. The trio consisted of Alexander Mashkevitch, Patokh Chodiev and Alijan Ibragimov, citizens of former Soviet republics in Central Asia with strong ties to post-Soviet Russian business and political networks. The source cited shows that these three oligarchs began their careers during the transition period from communism to capitalism in the early 90s. Patokh Chodiev, for example, worked at a Russian trading house said to have ties to the KGB. Following the privatizations in Kazakhstan, the three acquired important iron and coal mines at ridiculous prices, and their relations with the Kazakh dictator Nursultan Nazarbayev consolidated their economic-financial empire and their fortunes grew rapidly.

In 2011, ENRC acquired a manganese mine in South Africa called Kongoni for $295 million. British journalists claim that the price was exorbitant for a mine that, according to experts, was not even worth half that amount. Geologist Andre Bekker even warned that the geology of the mine does not justify the amount paid, raising suspicions that the deal could hide behind fraudulent activities of the oligarchs who run ENRC.

Basically, the Kongoni affair appeared to be a sophisticated scheme to siphon money from the company. Financial documents the South African detective investigated suggested the funds had been transferred through a network of offshore companies registered in jurisdictions with high confidentiality rules such as Mauritius. These transfers concealed the real beneficiaries of the transaction. Although Bekker had warned about the true value of the mine, the deal was completed at a price of $295 million, and shortly afterwards ENRC listed the mine at zero value, claiming that the collapse in manganese prices had been to blame.

Only the South African detective discovered that mines like the one at Kongoni have become breeding grounds for dubious financial practices. In 2013, just two years after the acquisition, ENRC declared massive losses related to the Kongoni mine, but offered no clear explanation of how and why such a high price had been paid initially. The ongoing investigation established that the transaction had been designed to move money into the private accounts of the Trio that runs the Eurasian Natural Resources Corporation.

• SFO investigates but finds insufficient evidence

As evidence of corruption and fraud mounted, the South African detective reported the matter to the UK's Serious Fraud Office (SFO), which is responsible for investigating major financial crimes. The OFS had already investigated ENRC over allegations of bribery and corruption in other mining projects in Kazakhstan and Congo, and the Kongoni deal seemed to fit the same pattern. The OFS investigation focused not only on the acquisition of the Kongoni mine, but also on other suspicious transactions in Africa and Central Asia. Investigations by British officials should have shown that the Trio at the top of ENRC had extracted large sums of money from the company through deals arranged for their own advantage. Corruption and bribery seemed to be the central mechanisms fueling these operations, to which the South African detective added the assassination of Bekker.

Journalists from The Guardian show that the investigation started by the OFS was blocked by many obstacles. As the investigation progressed, ENRC and its lawyers launched a massive legal offensive, which included lawsuits against their own lawyers, such as Neil Gerrard, whom they accused of professional treason. Gerrard, a former police officer turned fraud lawyer, had originally been hired by ENRC to investigate the internal allegations, but was later accused by the company of unduly widening the investigation to generate more fees.

In 2023, after a long legal battle and a series of defeats for the OFS, the British agency was forced to close the investigation, citing a lack of "sufficient admissible evidence". This decision was seen as a humiliating defeat for the OFS, which had hoped to bring to justice a number of prominent figures involved in global corruption.

Despite the closure of the case in the UK, South African detective Clement Jackson continued to investigate the Kongoni affair on his own and is confident that the truth about Bekker's death and the fraud behind the Kongoni affair will come out to bring justice to all those affected of corruption in the mining industry.

• London - the global capital of money laundering?

The quoted source says that over the past decades, London has become increasingly associated with global flows of dirty money, despite speeches and public initiatives on fighting corruption. Leaders such as former prime minister David Cameron have promoted conferences aimed at fighting corruption, but at the same time, the British capital has been transformed into a haven for those who profited from the collapse of the Soviet Union. Since the 1990s, Britain has become a magnet for Russian oligarchs and other billionaires from the post-Soviet space, who have invested in luxury properties, football clubs, donated heavily to British political parties and universities, consolidating their positions among the British elite. With the support of elite lawyers and PR firms in London, these individuals built images of visionary tycoons. However, the truth about the source of these fortunes began to emerge, revealing crimes and acts of corruption committed behind the facade of respectability. With these revelations, troubling questions have arisen: are these oligarchs really under British law, or does their colossal influence and wealth afford them a form of impunity? Despite the lawsuits and investigations initiated against them, many observers believe that these billionaires continue to evade legal consequences.

In the case of ENRC, although the OFS closed the investigation, the British public institution was sued by the respective corporation for the image damage caused. The corporation's lawyers claim that the firm has spent almost half a billion dollars on "professional fees and other litigation costs", an amount which, in the event of the OFS losing the dispute, would be paid from the taxes and fees paid by the British taxpayers.