Dirty business

For once in a while I have actually read one of those rather long pieces in the Guardian called the long read. They usually look far too heavy for me, but this one, reference 1, for some reason, I actually read.

Once upon a time, more than ten years ago now, a company called ENRC was incorporated in London and was a proud member of the FTSE100. An energy and minerals company which had started in Kazakhstan, but which had expanded to Brazil and in a bigger way to southern Africa. It was owned by a clunch of politicians and businessmen who had done well out of the break up of the Soviet Union, aka dictators and oligarchs. Their operations were a bit wild west, but for a while it suited them to be listed in London, while retaining four fifths of the shares themselves. See references 3 and 4.

Then around ten years ago a manganese mine called Kongoni, owned by the clunch, changed hands for around $150m more than it was worth, that is to say around $150m. The transaction appeared to involve ENRC paying the $300m and then writing the asset down to zero. Lots of shady intermediate companies in funny places. In so far as this involved sucking money out of a listed company which they mostly owned, it is not clear to me what was in it for the clunch. Except that they were probably up to no good: one does not go in for shenanigans of this sort unless one is doing something wrong.

At the same time there was talk of large scale bribery in their other African operations. And a geologist was murdered - a crime which does not appear to be domestic (as it were) and which has not been cleared up. 

As a result of all of which the SFO got cracking. ENRC hired a policeman turned lawyer to help them deal with the SRO, a lawyer who went on (it seems) to play both sides for gain and to lie in court about it. Which fatally damaged the SRO case against ENRC, abandoned last year. Part of this being the widely applied rule that you cannot use tainted evidence, even if that evidence proves the defendant guilty. We are told that the SRO has now set aside £250m to pay damages, should ENRC win their forthcoming case against them, I think for defamation, abuse of powers or both.

The winners in this sorry tale, apart from the clunch, appear to be all the City lawyers who have made a fortune out of it. Hundreds of millions. Plus the more modest sums gathered in by the arguably more dubious types operating around the fringes.

When all this kicked off, ENRC decided that a London listing was not the thing after all, went private and decamped to Luxembourg where they are not anything like so nosey.

My thought was that our green and pleasant land is in a sorry state if we are reduced to this sort of thing to make a living. No so very different from poor countries making a living out of rich sex tourists.

PS 1: maybe our new prime minister, with his legal background, will make a serious attempt to fix the SFO. But I am not holding my breath: it's all just too difficult: Davids do not usually win when up against Goliaths; only in the Bible.

PS 2: I remember going to a talk at the London Wikimania conference, some years ago now, where an editor talked of the abuse that editors editing articles of topical interest can be subject too, enough of it and unpleasant enough that most editors hide behind pseudonyms. Probably not proof against serious attack, but good enough to keep the average yobbo off your back. I dare say the article at reference 3 has attracted the interest and attention of ENRC. If Burgis is to be believed, they would certainly be good for some deniable yobbo-hiring.

PS 3: the mine in question appears to be alive and well, with the snap above not being very old at all. But it does not tell us what it is worth, just that that worth is very sensitive to the price of manganese. Which, like that of most commodities, goes up and down.

PS 4: the good news is that with the cooler weather, the second rise is back under control and batch No.729 of (wholemeal) bread turned out very well. Helped along by turning the oven on a little early, rather than waiting for the dough to be nearly ready, which, of late, has been all too easy to get wrong.

References

Reference 1: how the oligarchs took on the UK fraud squad and won: It began as a routine investigation into a multinational called ENRC. It became a decade-long saga that has rocked the UK's financial crime agency - Tom Burgis, Guardian - 2024.

Reference 2: https://tomburgis.com/.

Reference 3: https://www.eurasianresources.lu/en/home.

Reference 4: https://en.wikipedia.org/wiki/Eurasian_Resources_Group.