EURASIAN NATURAL RESOURCES CORPORATION LIMITED v DECHERT LLP [2022] EWHC 1138 (Comm)

“I'm an engineer of the supply/purchasing department at the SSGPO JSC, Rudnyi, Kostanayski Region, and I'm writing to you on behalf of a group of 4 employees to report certain facts of corruption and financial wrongdoings, that have been happening at the enterprise in the last few years. The relatives of the director are constantly present at the Rudnyi headquarters, and are intentionally and out of self-interest limiting competition amongst those taking part in the tender processes/potential suppliers. Currently, 90% of those who work with the enterprise, are those who give kick backs to the director and his relatives. To facilitate this, various manipulations are happening at the tendering stage. Some of the acquired machinery is not at all included in the tenders organised on ENRC's goods and services purchasing website, and is instead bought directly at inflated prices. Moreover, the machinery is very often of low quality and doesn't comply with the stated requirements. The managers, and also their deputies, of all the subdivisions are forced to buy the machinery at inflated prices. For example, deputy head of security Razmat, is not hiding and boasts about having monthly kickbacks worth $200,000 - 300,000. Farhad Ibragimov also doesn't hide that he receives $30,000 - 40,000 every month, protecting himself with his highly esteemed uncle's name. Former employee - Satyr Parhatovich Sadykov, has not been employed by SSGPO for a few years, but nevertheless freely accesses the central office and in having enormous influence and support from highly-placed relatives, is threatening procurement engineers with redundancies and is literally shoving equipment that, according to our factory workers, is poor quality and often second-hand from the Pervouralsk and Uralmash factories. The father of SSGPO's Director's wife, is not an employee of the SSGPO, however using his connections as a relative of the esteemed Mr Shodiev, is forcing the purchase, at hyper inflated prices, of Rudgormash factory's equipment for the SSGPO and for other company enterprises. It is also widely known that the director of the SSGPO has bought a state-owned farm in our region and it is known for a fact, that payment for the equipment, spare parts and running repairs is coming out of the SSGPO's budget. For obvious reasons we are unable to disclose our surnames, but we hope that you will conduct the necessary investigations and take the necessary measures.”

“In any case where proceeds of crime have been identified but it is not feasible to secure a conviction, or a conviction has been secured but no confiscation order made, relevant authorities should consider using the non conviction-based powers available under the Act.”

“…in circumstances where the defendant’s involvement or co-operation is necessary to the breach intended by the contract breaker, then the defendant who participates in this way with the relevant knowledge is liable. He submitted that the necessary element of causative participation was satisfied if the defendant does an act which enables the contract breaker to breach his contract and without which no breach would occur. In such circumstances the defendant is sufficiently instrumental in causing the breach to be liable. Active persuasion by the defendant is not required.”

“[51] In the course of his judgment…Roxburgh J, commenting on the use by Lord Macnaghten of the word ‘interference’ in Quinn v Leathem…considered that mere passivity would not be sufficient to give rise to liability. An example of mere passivity is found in the decision of the Court of Appeal in Batts Combe Quarry Ltd v Ford…In that case a father who had sold his quarry business with a covenant not to be engaged or concerned in the business of a quarry within 75 miles for a period of ten years, provided funds to his sons to purchase and operate a quarry in the immediate neighbourhood of the quarry which he had sold. The funds were provided gratuitously to his sons. He was held liable for breach of contract but the claim for inducing his breach of contract against the sons was dismissed at first instance, a decision which was affirmed by the Court of Appeal. Dealing with this Lord Greene MR said…: ‘First of all it was said that the sons, by accepting their father’s bounty amounting to something over £7,000, did procure him to break his covenant—that is assuming, of course, that the finding of the money by the father was a breach of covenant. Assuming that, it was said that that was a procuring of a breach of contract. In my opinion, that argument is completely misconceived. The tort of procuring a breach of contract requires something much more than that. Mere acceptance of a proffered bounty given in breach of covenant cannot, it seems to me, be said to be in any sense a procuring of a breach of contract.’ [52] The terms of the hive-down agreement are readily distinguishable from the mere acceptance of proffered bounty. Not only did Mir Steel agree to purchase the equipment as part of the assets of the business for a very substantial price which it paid with funds advanced to it by Libala, it also undertook significant and continuing obligations. These included, for example, the obligation contained in cl 9.5 that it would be responsible for settling any claim made against it by the claimant in respect of the hot strip mill. The agreement by Mir Steel to purchase the equipment and other assets on the terms of the hive-down agreement is in my judgment, consistently with the authorities on which Mr Boyle relied, at least arguably sufficient to constitute acts required for liability in tort for inducing a breach of contract.”

“ A commits a tort and attracts liability to C because he does something which joins in with the conduct of B in a way which makes him an accessory to the breaking of the contract by B.”

“39 To be liable for inducing breach of contract, you must know that you are inducing a breach of contract. It is not enough that you know that you are procuring an act which, as a matter of law or construction of the contract, is a breach. You must actually realize that it will have this effect. Nor does it matter that you ought reasonably to have done so. This proposition is most strikingly illustrated by the decision of this House in British Industrial Plastics Ltd v Ferguson in which the plaintiffs former employee offered the defendant information about one of the plaintiffs secret processes which he, as an employee, had invented. The defendant knew that the employee had a contractual obligation not to reveal trade secrets but held the eccentric opinion that if the process was patentable, it would be the exclusive property of the employee. He took the information in the honest belief that the employee would not be in breach of contract. In the Court of Appeal …MacKinnon LJ observed tartly that in accepting this evidence the judge had vindicated his honesty . . . at the expense of his intelligence but he and the House of Lords agreed that he could not be held liable for inducing a breach of contract… 42 The next question is what counts as an intention to procure a breach of contract. It is necessary for this purpose to distinguish between ends, means and consequences. If someone knowingly causes a breach of contract, it does not normally matter that it is the means by which he intends to achieve some further end or even that he would rather have been able to achieve that end without causing a breach. Mr Gye would very likely have preferred to be able to obtain Miss Wagner’s services without her having to break her contract. But that did not matter. Again, people seldom knowingly cause loss by unlawful means out of simple disinterested malice. It is usually to achieve the further end of securing an economic advantage to themselves. As I said earlier, the Dunlop employees who took off the tyres in GWK Ltd v Dunlop Rubber Co Ltd…intended to advance the interests of the Dunlop company. 43 On the other hand, if the breach of contract is neither an end in itself nor a means to an end, but merely a foreseeable consequence, then in my opinion it cannot for this purpose be said to have been intended. That, I think, is what judges and writers mean when they say that the claimant must have been “targeted” or “aimed at”

“[46] Mr Downes submitted on the basis of these paragraphs that the breach of the April 2000 agreement involved in the sale of the equipment was no more than a foreseeable consequence of the hive-down agreement. It was not therefore a result which could be said for the purposes of this tort to have been intended by Mir Steel. I am unable to accept this submission. It seems to me to be the case, or at any rate to be reasonably arguable, that the breach of the April 2000 agreement was the means by which the aim of transferring the equipment as part of the hive-down agreement was achieved. If the transfer of the equipment constituted a breach of the April 2000 agreement, then a breach of that agreement was necessarily involved in the transfer. In other words, without the breach the transfer could not be achieved. The breach of the April 2000 agreement was not the end in the sense used by Lord Hoffmann. Just as Mr Gye would very likely have preferred to have been able to obtain Miss Wagner’s services without having to break her existing contract, so no doubt Mir Steel would have preferred to have taken a transfer of the equipment without any breach of the April 2000 agreement. But, as Lord Hoffmann observed, that does not matter. The breach of the April 2000 agreement was integral to the transfer and not, as in the case of the breach by the recording company of its contract with backing musicians resulting from Shirley Bassey’s breach of her recording contract, a mere consequence.”

“… So closely connected with acts [the employee] was authorised to do that, for the purposes of the liability of his employers to third parties, his [tortious conduct] may fairly and properly be regarded as done by him while acting in the ordinary course of his employment.”

“only u and 2 know about s2”

“158AA. Mr Gerrard has admitted that he must have known that Mr Depel was going to go to see the SFO, that he was on notice of the fact that Mr Depel had been served with a s2A notice and that he failed in his duty to ENRC by failing to inform it of these matters.”

“Cary here. The ceo of the sfo resigned last week. Is that a job worth having? Could you make some enquiries for me. Thx.”

“Just a short note on Neil Gerrard with whom I understand we are in an advanced stage of discussions. I came across him when I worked on the ...European restructuring in the wake of the Chapter 11 filing. Weil Gotshal were the debtors counsel in the bankruptcy and because of the implications for the wider group, Weil’s London office was asked to assist the European subsidiaries of which there were about 120. Neil and his team were brought in by the directors I am not sure how.. The DLA team was made up of Neil… The DLA team did not come across as an elite group in the many meetings I spent on the opposite side of the table to them. Neil was heavily involved at the beginning, and he did I think gain the confidence of the UK directors of. . . who seemed to place a lot of importance on what he said (but …and not the directors were paying DLA’s fees). If you had asked me or AlixPartners at the time whether the advice Neil’s team was giving was unduly negative and to an extent scaremongering in order to increase DLA’s fees the answer would have been a resounding yes. The overall impression I formed of them is that they made a little go a long way, by which I mean that they were advising the UK directors (plus the European directors) on their potential liability under the various insolvency regimes applicable in the jurisdictions in which… had subsidiaries, without perhaps recognising that it was not in anyone’s interest for these local entities many of which held telecoms licences to be allowed to become insolvent. As a result I think Neil spent a lot of time charming the European CEO of… who then abruptly resigned once some emails emerged which cast doubt on her judgment as regards prior accounting practices… at in Europe. In summary, I think the technical legal advice they gave was ok, but it was straightforward issues they were advising on. ..They did not make themselves particularly popular with either… Weil or AlixPartners and came across as something of an irritant. Neil as I recall was capable of a lot of charm, but I did not see a great deal of substance from him in the meetings. I got the impression he used others to do the work.”

“… The company has agreed to self-report and… Dechert will be the lead law firm. Hooray.”

“loosely and perhaps hastily drafted… The heart of the matter is paragraph 8, whereby the SFO agreed there would be no further investigation or prosecutions of any member of the BAE Group for any conduct preceding 5.2.10… surprised to find a prosecutor granting a blanket indemnity for all offences committed in the past, whether disclosed or otherwise. The US Department for Justice did not do so in this case…”

“…a fine of US$12.7 million would have been wholly inadequate as a fine to reflect the criminality displayed by Innospec Ltd. This was corruption involving the payment of very substantial amounts to the most senior officials of the government of Indonesia over a long period of time. …this court was placed in a position where it had little alternative but to agree to the limit of US$12.7 million, if it was to avoid injustice. It must, however, be appreciated that the circumstances of this case are unique. There will be no reason for any such limitation in any other case... …As it…is for the court ultimately to determine the sanction to be imposed for the criminal conduct, an agreement between prosecutors as to the division, even if it had been within the power of the Director of the SFO (which as I have explained it was not) cannot be in accordance with basic constitutional principles.…Nor in my view was the division agreed one which on the facts of the case accorded with principle. The gravamen of the criminality was centred in the UK…My provisional view is that the amount should have been divided 50-50 [between the US and UK authorities, rather than 68 (US) - 32 (UK)] … I have concluded that the Director of the SFO had no power to enter into the arrangements made and no such arrangements should be made again.… There was at some stage a suggestion that a press notice in a form approved could be issued by Innospec. This is not a practice which should be adopted in England and Wales…It would be inconceivable for a prosecutor to approve a press statement to be made by a person convicted of burglary or rape; companies who are guilty of corruption should be treated no differently to others who commit serious crimes.”

“Our starting point is that the conduct of the former Director has to be considered against the background of the duty that there was imposed on him. That duty was the heavy and critically important duty of ensuring that the information presented before Judge Worsley QC in support of the application for the warrants contained accurate and comprehensive material which itself was the product of a very careful and well-balanced investigation. All these matters must have been apparent to the former Director. In this case, for the reasons explained in our judgment, the former Director wholly failed to discharge this duty in circumstances in which the claimants’ reputations were bound to be seriously damaged by the issue and the execution of the warrants, given the very public manner in which this was done..”

“At present, the SFO carries out some of its casework to a high standard, but there is clear room for improvement. This is borne out not only through our inspection findings, but also in the views of the many stakeholders we have consulted…Therefore, much needs to be addressed if the SFO is to become a respected crime fighting organisation which is the envy of the world. The new Director recognises this and is fully committed to driving improvement. With this in mind he has invited me to re-inspect within the next two years, and to assess progress against the recommendations made in this report, which should be viewed as a staging-post on the road to success.”

“The SFO has some very capable operational staff, but the quality of casework handling, and the capability of the SFO to assure itself of this is significantly undermined by weakness in systems and processes. Its casework handling processes are weak, and need urgent streamlining, including the standardisation of forms and record keeping. Case management compliance levels are currently insufficient, and new processes need to be mandated through effective performance management. Quality assurance is essential, and the new Director recognises this…..It should be noted that the timing of the inspection means that findings relate almost exclusively to casework quality levels and systems under the previous Director.”

“I'm sending this to you as I'm not certain of Neil's e-mail address. Can I ask you to raise with Neil the comment he made over coffee about having a face to face discussion with certain parties about the lay of the land. I have had a long think about this, and before you say anything yes it did hurt, and decided that I not only should but arguably must if there is a possibility of moving the entire topic forward. As such could you mention that I would, if the certain party wishes to, like to do this sooner rather than later (nothing sinister but I have some personal issues in the near/mid future which may impact on my ability to fit in with diaries at a later date). Apologies for using you as a conduit.”

“Civil recovery consent orders in cases settled before April 2012 [when Mr Alderman retired] are not disclosable, due to a provision in the orders themselves…The result is a concerning lack of transparency, and stakeholders… raise the suspicion that corporate bodies have been allowed to escape criminal justice on acceptance of a financial penalty. Cases such as Mabey & Johnson and BAE Systems have been criticised for this…there are few accessible records of the negotiation and decision-making process… [S]ome [SFO staff] have criticised the disinclination of those making the decisions in the past, within the SFO, to refer to case investigation teams, and consider the strategy in light of all the evidence…There is clear reputational risk to this, and it has served to undermine staff confidence.”

“Think we have another very interesting option which may have been staring us in the face. Will not explore it here nor over the mobile. Will call when I get back to the office. Times, page 35. Explosive.”

“56. I remember that in the days that followed this meeting, Mr Gerrard and I had a furious argument, I believe outside ENRC’s offices, during which he ranted and swore at me repeatedly. Mr Gerrard told me that there were distinctive notes and marks on pages of the documents that had been leaked to the press that could have identified him as the source of the leak. Mr Gerrard explained that he had “worked overtime” to “sanitise” (or words to that effect) the copies of the leaked documents in Dechert’s possession by removing these notes and marks. I remember saying to him “what the fuck do you think we were up to Neil?” (or words to that effect). I did not understand why Mr Gerrard was so agitated and angry at me as, when I had given Mr Trevelyan the envelope Mr Gerrard had provided me with, I had simply executed the plan Mr Gerrard and I had agreed on. 57. Following this conversation, I do not recall ever discussing the leak again with Mr Gerrard.”

“It had occurred to Mr Gerrard when reading The Times article that the investigation into the source of the leaks could be approached from a different angle by searching for who at ENRC had been sent documents containing the phrases that had been directly quoted in the article. Mr Gerrard wanted to discuss this idea with Mr Findlay.”

“yes the list of names is fine.…In addition please could you do a separate search on the email database image from early June on the following phrases (across any inbox not just the names listed). These phrases are taken from the leaked email and I want to trace who may have had or transmitted content of this email. For this search, the date range can be restricted to 1st May to 8th June. The phrases are I think it would be very, very unhelpful Just to be crystal-clear What we can’t be is a hybrid that I do not believe that he should become chairman”

“Can I also book a return taxi for Neil from City airport please. He will be landing at 21.05 this evening. He will want taking to SE1 and his client will then go on to SW11. I also have a package for the driver to collect from me to give to Neil when picking him up. Please can you let me know what time you need this ready for?”

“CAMERON FINDLAY: Yeah, well, yeah, I also want to make sure that, you know, yeah. I would like to be there too for that Because I don’t want us to be blamed because the FRA can do it three weeks quicker than us. NEIL GERRARD: It’s bit more than that mate. CAMERON FINDLAY: No it’s not [laughs]. NEIL GERRARD: It is. CAMERON FINDLAY: I can assure you it’s not. NEIL GERRARD: I can assure you it is. Even by Rob’s own estimate, he was eight weeks from getting it all on. But we’ve been through this for ages, we’re not going to blame anyone. I told you that in Zurich. We’ve just got to get this over quickly, You know, this is just not what Rob does. He’s great on the imaging side, he’s been fantastic but we’ve been, we’ve known we’ve had a problem for months and months, we’ve just got to get this on. Otherwise we’re goanna end up being fucked… CAMERON FINDLAY: You know I don’t understand where this months and months has come from because the meeting was on 6 December... NEIL GERRARD: No, hang on. You and I fell out God knows when and… CAMERON FINDLAY: December. NEIL GERRARD: ...yep…and we’ve been having emails, I’ll go back, if you want me, I’ll get the emails, the constant emails and moaning we’ve had on both sides for months and months. We’ve been worrying about… CAMERON FINDLAY: 6 December... NEIL GERRARD: No, well before then, CAMERON FINDLAY; No, no, the meeting took place on 6 December”, NEIL GERRARD: No, no...which meeting was that? CAMERON FINDLAY: ...with Simon. Simon, Caroline and Karen... NEIL GERRARD: Which meeting was that? CAMERON FINDLAY: In Dechert’s office. NEIL GERRARD: No. CAMERON FINDLAY Simon... NEIL GERRARD; No, what about the time way before that when we had coffee? CAMERON FINDLAY: And you said “don’t worry about it, we’ll sort it out next year”

“I remember that in the days that followed this meeting, Mr Gerrard and I had a furious argument, I believe outside ENRC’s offices, during which he ranted and swore at me repeatedly. Mr Gerrard told me that there were distinctive notes and marks on pages of the documents that had been leaked to the press that could have identified him as the source of the leak. Mr Gerrard explained that he had “worked overtime” to “sanitise” (or words to that effect) the copies of the leaked documents in Dechert’s possession by removing these notes and marks. I remember saying to him “what the fuck do you think we were up to Neil?” (or words to that effect). I did not understand why Mr Gerrard was so agitated and angry at me as, when I had given Mr Trevelyan the envelope Mr Gerrard had provided me with, I had simply executed the plan Mr Gerrard and I had agreed on.”

“A letter had been received from the SFO following the recent press reports on internal investigations. The letter confirmed that no action was being taken by the SFO at this time.”

“It is to be inferred from the facts and matters pleaded below that Mr Alderman had been provided by Mr Gerrard with the 2011 Leaked Material (or, alternatively, the substance of the confidential and privileged matters addressed in the August 2011 Article) prior to publication of the August 2011 Article.”

“On a separate matter NG raised a “hypothetical” issue concerning a large multinational , who he said may have approached him, that might be upset with the behaviour of a “white collar” law firm in dealing with SFO enquiries. The hypothetical company were being advised to prevaricate rather than assist. I told NG that he should seek to speak with you personally on a hypothetical basis to discuss matters informally , (certainly before the 26th October). I am back in the office on Monday and happy to discuss further if required.”

“He is quite right re the ownership of ENRC… His summation re the takeover of the Kolwezi mine is almost correct. The problem he has is that he is unaware of the consent SAR submitted on behalf of ENRC. Whilst other organisations may have felt there were issues and possible Proceeds of Crime implications by obtaining consent to the deal from the Met Police ENRC must have felt they had done nothing wrong, and therefore if the appropriation is ruled illegal then it is the government of the DRC who will have to recompense First Quantum. That is not to say that ENRC are innocent of all charges, and in respect of there actions in the DRC there are moral issues, but at present there is no evidence of criminality on their part re this deal. That is not to say that when the Bribery Act comes into force we may want to invite them in to tell us of the procedures they have in place to prevent the payment of bribes to overseas officials, but a lot of UK companies deal in natural resources in Africa. Re the proposed sacking of non exec directors and Sir Richard Sykes there is no evidence of criminality of a nature which would concern the SFO. This is, in my opinion, an area for the FSA to look into. However in view of the names of some of the MP’s who were at the House and voted on a earlier motion it may be worthwhile re asserting our commitment to deal with corruption where there is evidence.”

“Neil Gerrard Represent Audit committee Africa Jones Day too close PwC—auditors If they go offshore it will be [because] of [possibility] of [increased] o/sight by NEDs DoJ involvement. US Citizens are directors/NEDs. V Russian culture. They need to understand big problem.”

“…not happy with Jones Day. CF: Why..is this incompetence or...? NG: No no, I think they..they think they're too close to the company. CF: Which is probably true. NG: Which is true. Er I assume…”

“Friday 30/9/11—11.30am Client knows he came to see SFO! Told them it was serious/concerns. Various factions in company. Aware of SAR’s. Dan Gertler? Yes. Shaun Richard—Jones Day/Herbert Smith acting? Friction between the two. Neil—Audit Committee—proposes to play it low key. (may not want to do the business review). I believe it ought to be for Audit Committee. Independent law firm required. Agrees. Ask Neil to explain his areas of concern what does he want to express.”

“BE stated that ENRC had taken the letter from SFO very seriously and that the Board were keen to ensure that as a Company they are fully compliant and that governance is properly applied across the group. The tone from the top is very serious. They discussed the issues at the Board meeting last week, which was also raised with the Audit Committee… BE made it plain that he had only accepted the position if he could be sure that he had the full support of the board and that compliance matters were transparent… Sion Richards (SR) stated that ENRC had asked Jones Day to undertake a full review of the company. They had been asked to focus on BA 2010… The SFO invited Neil Gerrard to explain his role (NG). NG confirmed that he was appointed by the Audit Committee as part of their investigative policy. He was initially engaged following a whistleblower (anonymous) covering a number of areas. A forensic analysis is taking place. They were reviewing a number of emails and DPA issues in Kazakhstan. They had been undertaking interviews and NG was looking to close enquiries in November. He will report to the company around his findings and the company were concerned about what exactly the SFO were worried about and where its focus was centred… The SFO made it clear that if the company were to make a self disclosure it would be able to manage its discussion with the US Department of Justice…”

“I have just spoken to Neil G and he has confirmed that our tactics worked and the main Board are to meet early next week and company will make a voluntary disclosure to us next week. The voluntary disclosure will come through Neil G acting independently of Jones Day (who were originally asked to do the compliance review as explained when we met them) on behalf of the audit committee and main Board. A full forensic audit of the Books and records will be undertaken. Neil G has said that he would like to talk about the work going forward and its structure, after next week, particularly once he has a clearer picture. He indicated that there were lots of red flags and ‘lots to tell’”

“But don’t forget the public statement of commitment by the Board.”

“I have just spoken to NG on telephone. He has confirmed that our meeting truly shook the company. They have an extraordinary Board meeting on Tuesday and will in his view agree to enter the Self Disclosure process. NG stated that they will be writing to us on Wednesday next week to confirm formally. On a separate matter NG raised a ‘hypothetical’ issue concerning a large multinational, who he said may have approached him, that might be upset with the behaviour of a ‘white collar’ law firm in dealing with SFO enquiries. The hypothetical company were being advised to prevaricate rather than assist. I told NG that he should seek to speak with you personally on a hypothetical basis to discuss matters informally, (certainly before the 26th October).”

“I refer to my letter of 5/6 October 2011 and to the subsequent discussion between Mr McCarthy and Mr Gerrard of Dechert LLP. As Mr Gerrard has explained, I have discussed the matters raised in our recent meeting with ENRC's Executive Committee. I also met yesterday with ENRC's Board of Directors, to seek their approval of a proposal to a) conduct certain further reviews of operations and b) to engage with the SFO regarding the results of those reviews. Although the Board meeting did take slightly longer to organise than originally envisaged, I am pleased to confirm that the ENRC Board members were entirely supportive of my proposal. I would therefore be grateful if you could let me know any suggested dates from 10 November when you would both be available for our next meeting. In the meantime, if there is anything further you wish to discuss, please contact me directly and I will make myself available.” (“the 9 November Letter”) will make myself available.”

“9.11 N.G Letter coming”

“Update from NG prior to meeting 12:55 call Do want to self report Tone from the top message—bit dilatory in doing this—slow to pull their finger out Need to do it properly if we go down this route  Need to be full + frank on all issues Emphasis on Africa but other jurisdictions which they should come clean on all issues (tho NG does not know this officially and may be kept away from it) Would resign if this continues as he does not wish to get drawn into a compromised position  Need to make the position clear to the company that full + frank disclosure is required and consequences of not doing so (contemporaneous note following me returning call of Neil Gerrard to Keith McCarthy)”

“…BE took those messages back to both the executive committee and the board, both of whom are fully committed to the process. There is a newly appointed senior independent director — Mehmet Dalman — who has taken responsibility for this area… NG said that ENRC have literally an army of advisors on bribery act systems and procedures. The tests that have been undertaken on those systems have raised red flags. The company are keen to tackle the issue and be full and frank… BE: the company are ready to deal with this. It has already started. It wants to get procedures right. That message comes from the CEO and the board… NG said the specific work being done in Kazakhstan concerned an allegation from a whistleblower regarding SSGPO (a subsidiary). A large number of people are alleged to be involved. It is a corruption and fraud allegation. NG has not seen any substantive evidence confirming the allegations yet…”

“Spk to Neil 16:39 13/12/11 … good opportunity for company appetite in SFO to see company improve re corporate compliance Split in co to co-op or not Jones Day force for good but they are involved in deals Shouldn’t be economical Client put more pressure re scoping—Jones Day were involved in deals Audit committee—odd at ENRC Weird situation Either one or both to meet [?]—quiet meeting falsification + destruction of docs Beat - mergers + acquisitions” good opportunity for company appetite in SFO to see company improve re corporate compliance Split in co to co-op or not Jones Day force for good but they are involved in deals Shouldn’t be economical Client put more pressure re scoping—Jones Day were involved in deals Audit committee—odd at ENRC Weird situation Either one or both to meet [?]—quiet meeting falsification + destruction of docs Beat - mergers + acquisitions”

“[…] Attritional battle to persuade [the] board that this is right way to go. Change their mind regularly Described key findings […] Provided [with] backdated paperwork Obstructed […] President of that company at heart of it Russian trading system—started again. Supposed to have been sorted out in 2007. 24% of sales are missing. Russian office operates intermediaries for insiders to skim profits. African issue—Camec, CAMROSE, Rautenbach… UN sanction breaches in there. Not going to be wrapped up quickly […] Timeframes? No comment Nothing about commitment to anti-corruption…. ”

“Neil Gerrard Co knows it is not SFO briefing press Confidential—Audit Committee to be more involved in what is happening Issues—Africa—3 [areas] red flags re books + records—Africa v odd lge consultancy with no paper Kazakh inv [1] docs etc Russian issues”

“This was an aspect of Mr Gerrard’s presentations that became frustrating over the course of the meetings. There was a lot of talk of “red flags” and presentations that hinted at wrongdoing but lacked specificity. In order to reach a civil settlement, we needed to know details that could provide a proper foundation for one; in other words, there had to be a tenable argument that money had flowed into ENRC that was derived from crime. The last line of my note of the 5 March, 2012 meeting says “formal report/presentation by early June.”

“MT also confirmed that the information provided on the issue of possible sanctions breaches in the DRC had been helpful. MT and NG discussed further issues: • Involvement of Salans and Philip Enoch (a Salans partner) in relation to the acquisition of Camec. • The due diligence process adopted by ENRC in respect of the acquisitions of Camec and CAMROSE, including the existence of internal audit reports which spelled out some of the risks. • The need for NG’s team to access the e-mail servers in London and Zurich in order to complete the investigation. … • Recent concerns found by NG in respect of an expensive excavator purchased by an ENRC company which appears to have already been owned and was also in a non-operative condition.”

“SFO worry that the board are wilfully blind. They haven’t seen… Fortunately not seen Pine + Crete [ie the HS reports on Camec and Camrose] or Audit reports [ie reports on those transactions produced by IA]. If they did we have a problem.”

“12.12A On 16 May 2012, the SFO (through Mr Thompson) issued Mr Depel with a notice, pursuant to s. 2A of the 1987 Act, requiring Mr Depel to attend an interview and to answer questions or otherwise furnish information and to produce documents, save for any information or documents protected by legal professional privilege. Shortly thereafter, the SFO (through Mr Thompson) interviewed Mr Depel over a period of about three hours (the “Depel Interview”). ENRC had no knowledge of the Depel Interview and had not authorised the disclosure by Mr Depel of material which was privileged to ENRC. 12.12B At the start of the Depel Interview, Mr Depel identified himself as a dual-qualified lawyer (US/English), who was ENRC’s Global Head of Compliance, with responsibility for ensuring ENRC’s compliance with laws in all of the jurisdictions in which it conducted business. Mr Depel further explained that he reported to ENRC’s General Counsel. From at least this point, the SFO (through Mr Thompson) knew that Mr Depel was an in-house lawyer at ENRC and that ENRC’s LPP should be protected. Alternatively, the SFO (through Mr Thompson) was subjectively reckless as to the need to protect ENRC’s LPP. 12.12C During the Depel Interview, the SFO (through Mr Thompson), acting with at least subjective recklessness: (1) induced, encouraged, or procured Mr Depel to disclose material protected by ENRC’s LPP; and/or (2) failed to stop Mr Depel from disclosing substantial amounts of such material. In particular: 12.12C.1 Mr Thompson repeatedly made inquiries of the circumstances and scope of Dechert’s instructions and investigation. For example, Mr Thompson asked: (1) (in relation to the period December 2010 to January 2011) “What was the scope of [Mr Gerrard’s] work at that stage?” [10]; (2) “Why do you think Neil hasn’t been able to … report these things to us more formally …” [16]; and (3) “Would this have been brought to Neil Gerrard’s attention” [34]. 12.12C.2 Further, Mr Thompson sought to elicit material protected by ENRC’s LPP about the work carried out by various other firms of solicitors acting for ENRC, including Jones Day, Herbert Smith and Peters & Peters. For example, Mr Thompson said: (1) “… so what about … corporate advisers then … Jones Day as current corporate lawyers, preceded by Herbert Smith … and then obviously Decherts in … Neil’s team” [26]; (2) “… what else have Jones Day done?” [27]; (3) “Do you know who commissioned [the Peters & Peters Report]” [44]; and (4) “What were they [sc. Peters & Peters] doing a report on?” [39]. 12.12C.3 In response to Mr Thompson’s questions, Mr Depel repeatedly referred to material protected by ENRC’s LPP, including in relation to: (1) the independence of ENRC’s directors [7]; (2) the integrity of the Chairman of ENRC’s audit committee [8] [24] and ENRC’s head of internal audit [25]; (3) the circumstances in which Mr Gerrard was retained, the scope of Mr Gerrard’s work (and how it changed over time) [35], the manner in which Mr Gerrard had conducted that work, certain advice provided by Mr Gerrard [32], and (alleged) difficulties Mr Gerrard had encountered [8]-[10], [12], [26]; (4) the manner of production and/or the content of confidential reports produced by Mr Depel for ENRC (in particular its audit committee) [9] [25] [32] [47] [62] and ENRC’s reaction to them [19] [32] [67]; (5) whether allegations contained in the 2010 Whistle-Blowing Email had been substantiated [11] [15] [16] [20]; (6) how seriously ENRC took its obligations to comply with the Bribery Act [20] [77]; (7) Mr Depel’s own advice to ENRC in relation to its compliance with statutory telecommunications and data protection provisions [22]; (8) the types and general content of “relevant material and evidence” that would be found at ENRC’s London offices [24]; (9) the advice that Jones Day had given in relation to ENRC’s engagement with the SFO (and Dechert’s advice as to its correctness) [27] and in relation to at least one corporate transaction [72]; (10) the existence [27], approximate date [28], significance [27] and certain of the contents of the Herbert Smith Report; (11) the existence [44], contents [44], and action taken by ENRC upon receipt of the Peters & Peters Report [44]; (12) Mr Depel’s own advice to ENRC in relation to its compliance procedures [55]; and (13) the way in which Dechert, Jones Day and Mr Depel drafted ENRC’s investigations policy [58]; and (14) Mr Depel’s own advice to ENRC on allegedly improper related party transactions [30] [57] [80]; and (15) Mr Depel’s own advice to ENRC in relation to sanctions issues [32] [35]; and (16) allegedly fraudulent insurance programmes [71]… 40.1A In the Depel Interview, the SFO (through at least Mr Thompson) induced, encouraged or procured Mr Depel to disclose material protected by ENRC’s LPP (and/or failed to stop him from doing so and instead recorded the same for subsequent use): see paragraphs 12.12B, 12.12C and 12.12E above. The SFO subsequently used such material in its investigation into ENRC. Accordingly, the SFO breached the LPP and Independence Duties…” 12.12C.1 Mr Thompson repeatedly made inquiries of the circumstances and scope of Dechert’s instructions and investigation. For example, Mr Thompson asked: (1) (in relation to the period December 2010 to January 2011) “What was the scope of [Mr Gerrard’s] work at that stage?” [10]; (2) “Why do you think Neil hasn’t been able to … report these things to us more formally …” [16]; and (3) “Would this have been brought to Neil Gerrard’s attention” [34]. 12.12C.2 Further, Mr Thompson sought to elicit material protected by ENRC’s LPP about the work carried out by various other firms of solicitors acting for ENRC, including Jones Day, Herbert Smith and Peters & Peters. For example, Mr Thompson said: (1) “… so what about … corporate advisers then … Jones Day as current corporate lawyers, preceded by Herbert Smith … and then obviously Decherts in … Neil’s team” [26]; (2) “… what else have Jones Day done?” [27]; (3) “Do you know who commissioned [the Peters & Peters Report]” [44]; and (4) “What were they [sc. Peters & Peters] doing a report on?” [39]. 12.12C.3 In response to Mr Thompson’s questions, Mr Depel repeatedly referred to material protected by ENRC’s LPP, including in relation to: (1) the independence of ENRC’s directors [7]; (2) the integrity of the Chairman of ENRC’s audit committee [8] [24] and ENRC’s head of internal audit [25]; (3) the circumstances in which Mr Gerrard was retained, the scope of Mr Gerrard’s work (and how it changed over time) [35], the manner in which Mr Gerrard had conducted that work, certain advice provided by Mr Gerrard [32], and (alleged) difficulties Mr Gerrard had encountered [8]-[10], [12], [26]; (4) the manner of production and/or the content of confidential reports produced by Mr Depel for ENRC (in particular its audit committee) [9] [25] [32] [47] [62] and ENRC’s reaction to them [19] [32] [67]; (5) whether allegations contained in the 2010 Whistle-Blowing Email had been substantiated [11] [15] [16] [20]; (6) how seriously ENRC took its obligations to comply with the Bribery Act [20] [77]; (7) Mr Depel’s own advice to ENRC in relation to its compliance with statutory telecommunications and data protection provisions [22]; (8) the types and general content of “relevant material and evidence” that would be found at ENRC’s London offices [24]; (9) the advice that Jones Day had given in relation to ENRC’s engagement with the SFO (and Dechert’s advice as to its correctness) [27] and in relation to at least one corporate transaction [72]; (10) the existence [27], approximate date [28], significance [27] and certain of the contents of the Herbert Smith Report; (11) the existence [44], contents [44], and action taken by ENRC upon receipt of the Peters & Peters Report [44]; (12) Mr Depel’s own advice to ENRC in relation to its compliance procedures [55]; and (13) the way in which Dechert, Jones Day and Mr Depel drafted ENRC’s investigations policy [58]; and (14) Mr Depel’s own advice to ENRC on allegedly improper related party transactions [30] [57] [80]; and (15) Mr Depel’s own advice to ENRC in relation to sanctions issues [32] [35]; and (16) allegedly fraudulent insurance programmes [71]… 40.1A In the Depel Interview, the SFO (through at least Mr Thompson) induced, encouraged or procured Mr Depel to disclose material protected by ENRC’s LPP (and/or failed to stop him from doing so and instead recorded the same for subsequent use): see paragraphs 12.12B, 12.12C and 12.12E above. The SFO subsequently used such material in its investigation into ENRC. Accordingly, the SFO breached the LPP and Independence Duties…”

“…I am very strongly of the view that the Chairman of the audit committee is corrupt and complicit with what goes on in the company”

“Who is the Chairman of the audit Committee?”

“A guy called Gerhard AMMAN”

“And why do you say that he is corrupt?”

“He spends most of his time trying to shut down, stifle, or impede what would otherwise be normal investigations that have either come to our attention through our own efforts or through whistle-blowing reports. This is something that if you can get out of the lawyer client privilege, Neil GERRARD could attest to and it has caused us no end of grief, he’s probably been on the verge of walking out several times” 2. 8-9 172:5 – 173:4 MT: “So was Neil, how did Neil Gerrard come to be retained?”

“I have been involved in the meetings with ENRC since November 2011, and have reviewed all the intelligence and open source material we have. The interview of Mr Depel is a major development. Overall I regard the information he has provided as credible, as it is generally consistent with the other information available to the SFO. The choice for the SFO is now whether to continue with the self reporting process. If Mr Depel is even partly correct, in my view it is inconceivable that a civil settlement would be an appropriate outcome. It seems to me that the overarching question is whether ENRC should be allowed to continue to access the UK capital markets when in reality those controlling the company appear to regard the UK's listing and corporate governance rules with contempt. It will not be an easy case to investigate and prosecute, but I recommend that the Director now considers adopting the case as a criminal investigation.”

“Dear Neil Eurasian Natural Resources Corporation Plc Further to our conversation this morning I am writing to confirm that we will meet at the SFO at 1.30pm this afternoon. The purpose is for you to provide us with an update on your progress and agree the immediate steps necessary for your client to continue to avail itself of our Protocol on Self-Reporting. In this regard, I would take this opportunity to remind your client of the following points: • The need for a frank and thorough formal report of any wrong-doing that has been discovered. • The requirement that the SFO is satisfied that the scope of the investigation has been not been restricted. • The Board of Directors have demonstrably committed to the process. We look forward to seeing you later today.”

“Neil… How are things progressing? Can we fix a meeting date for your latest findings?… Regards… Mark”

“Can we meet privately ASAP?”, to which Mr Dalman replied that he could meet at 4.30pm the following day. At 5:28pm Mr Gerrard sent a long email to Mr Dalman. He said that very little progress on Africa had been made since the SIC meeting on 9 May. He went on to say “I am now very concerned as we can expect contact from the SFO any day now regarding the proposed June meeting.”

“Can we talk ASAP? SFO not good.”

“VH hates talking to us. Drives it. Does deals. Said didn't know what Vipar loan was for. Says he didn't care. He says re: 35 million, needed it to pay liquidators on FQ. Because FQ was stymied they weren't doing anything. Had to put a bond up. Tracking payments 35 million gone into the bank account in Congo. Drawn out in cash over 10 days. Then been sent on to a BVI or Guernsey trust holding it on behalf of administrator. Tracked down 9-12 million for legal fees in Congo. 9 million for FQ legal fees in Africa. No docs from client on Metalkol 35 million… Promissory notes. HS great job on dd. Worry client. On reflection. Now thinking did we cover ourselves enough. Probably did. Can't get past. Second payment. Stirling [sic] UKLA looking at that… Kept at arms [sic] length by JD. JD done a certain amount of work. Missing 10% of story. Re-issue HS still… How do we pay 35 million w/ no background docs People do as frightened of VH Taken out in cash Then allegedly turns up in an offshore account FQ put in bond. Get back from [illegible] December. Not got around to it according to VH. Want to see documents. He is negotiating to get it back. He is trying to get it back to save himself. Camec / Camrose stinks… Hot docs_1 lever arch…”

“At a meeting held on the 20th August 2012 the potential resolution for Kazakhstan was raised, on a without prejudice basis, insofar as the company has clearly committed a ‘books and records’ offence and has ‘inadequate procedures’ in place to prevent bribery and corruption. The recoverable property could be a multiple of the annual cost of suitable anti-bribery and corruption compliance resources. The basis for not prosecuting would be an extension of the fact that the victim has been ENRC. This may lead to a ‘first stage’ [sic] CRO in an amount ranging from £1 to £2 million through to £8 to £10 million.”

“Sorry bad signal on the train. DGCBQC has shown he ignores or passes such requests for meetings etc back to the case team. We should have Alun Milford with us when we meet next week. That move is my suggestion to the 9th floor to get them on board as to how I believe this could be resolved—2 parts, one non pros and one pros (although the 2nd part may be more than one defendant). I believe AM will take a reasonable stance when the material is viewed; it is, in my opinion, after all not material we are ever going to get in an evidential format. Happy to chat later if you/client need more comfort—should be available from about 6.45 or so (or tomorrow afternoon in the office). DG (the non CBQC one!).”

“As you are aware we have prepared a draft report regarding our investigation into SSGPO, a subsidiary of ENRC. ENRC entered into a corporate self report process with the SFO under: • the Attorney General's Guidelines on Plea Discussions in Cases of Serious or Complex Fraud dated 18 March 2009; and • the Approach of the Serious Fraud Office to Dealing with Overseas Corruption dated 21 July 2009. We note that the SFO restated its approach to corporate self reports on 9 October 2012. A questions and answers document issued by the SFO… on this date stated that: If before the publication of the revised policy statements the SFO entered into an agreement, with a corporate body based on an earlier SFO statement of policy or practice, and the corporate body has fully complied with the terms of that agreement, then the previous statement of policy or practice will continue to apply. Given the restatement, we would like confirmation that ENRC is still part of the corporate self reporting process prior to Dechert submitting our report on SSGPO. Any report submitted by Dechert to the SFO will be submitted under a limited waiver of legal professional privilege for the purposes of the corporate self report only. Should an equitable settlement not be reached between the SFO and ENRC, please confirm that it is accepted that the report will not be used by the SFO as evidence of any wrongdoing or in any criminal proceedings against either ENRC, any subsidiary of ENRC or any employee or director of ENRC or its subsidiaries.”

“Thank you for your letter of 12 December 2012 to Dick Gould, which I have been asked to respond to. In essence you raise 3 matters: 1. You seek an assurance that ENRC is part of "the corporate self-reporting process" in light of the restatement of the approach to Corporate self-reporting, dated 9 October 2012 2. You state that any report submitted by Dechert to the SFO will be submitted under a limited waiver of Legal Professional Privilege, for the purpose of the corporate self-report only, and 3. You seek an assurance that the SFO will not use that report as evidence in any criminal proceedings against ENRC, its subsidiaries or any directors and employees of ENRC or its subsidiaries, should an "equitable settlement" not be reached between the SFO and ENRC. Regarding point 1: As you are aware any decision to prosecute unlawful activity will be governed by the Full Code Test in the Code for Crown Prosecutors, the Joint Prosecution Guidance on Corporate Prosecutions and, where relevant, the Joint Prosecution Guidance of the Director of the SFO and the Director of Public Prosecutions on the Bribery Act 2010. As the existence of a criminal investigation is a precondition to the applicability of the Attorney-General's Guidelines to which you refer, I do not accept that they are applicable in this case, at this stage. One of the factors that the SFO will consider is whether there has been a "genuinely proactive approach adopted by the corporate management team when the offending is brought to their notice, involving self-reporting and remedial actions". Self-reporting is not, and never has been and never could be, a guarantee that a prosecution will not follow. Each case must turn on its own facts. In this case the SFO approached ENRC, by means of a letter on 10 August 2011, in relation to allegations that had appeared in the press. Since that time although there has been a number of meetings between the SFO and ENRC and its legal representatives, and an internal investigation has been on-going, as yet no report nor any supporting evidence has been provided to the SFO. In any event no civil recovery settlement or plea agreement has been reached with ENRC. We await your reports and will analyse them in detail prior to making any decisions as to the way forward, including any possible prosecutions. You will appreciate that this is the only principled way we can deal with this case, or indeed any other case. Regarding point 2: It is a matter for ENRC and its legal advisers as to which, if any, elements of the reports are covered by LPP, and whether they waive any privilege that may attach. However please be aware that in assessing whether a company has adopted "a genuinely proactive approach" the Guidance on Corporate Prosecutions states that "the prosecutor needs to establish whether sufficient information about the operation of the company in its entirety has been supplied... This will include making witnesses available and disclosure of the details of any internal investigation". In light of the fact that we have not seen these reports, no assurances can or will be given at this stage that we accept it is subject to LPP or accept any conditions that you propose to attach to service of the reports. Regarding point 3: No assurances can or will be given at this stage as to what use the SFO will make of any report that may be provided to it. The SFO cannot and will not give any assurance in relation to underlying material, or evidence, upon which the reports are based, or which is provided in support of the reports. We are concerned at the apparent lack of progress since August 2011. We understand that your report on Kazakhstan has been completed, subject to an addendum dealing with the issue of the Chief Financial Officer, and that your report on the Congo is nearing completion. You will appreciate that if we cannot progress these matters with your assistance, we have no alternative but to progress them without your assistance. Therefore if we do not receive your report on Kazakhstan by close of business on Thursday 31 January 2013, we will have no option but to open a criminal investigation into ENRC's activities there, with a view to the exercise of our investigative powers. Assuming your report is received, we can agree a timeline for submission of any addendum report in relation to the CFO, and the report in relation to the Congo.”

“Thank you for your letter dated 21 January 2013 to Mr Neil Gerrard of Dechert LLP. I wanted to personally respond to that letter. I am both concerned and disappointed with your letter, in particular, your comments regarding the corporate self-reporting process. Dechert have been engaged to conduct an independent in depth investigation exercise, to which the company has devoted a very substantial amount of management time and resource at all levels, and alongside this we have been engaged in an ongoing programme considering and implementing appropriate remedial actions. The SFO have of course been kept well briefed along the way. I can assure you that the committee with responsibility and oversight over this investigation (the "ENRC Special Investigations Committee") has worked tirelessly over the past six weeks. You will be able to gauge the volume of work that has been carried out when you read the draft report dated 12 December 2012 in respect of Kazakhstan (in the form requested in your letter) that we intend to deliver to you on or before 31 January 2013. In relation to Africa, that extensive investigation is continuing, fully supported by me and the Board of ENRC PLC. We look forward to engaging with you on the timetable for submission of that report. It remains our prime objective to reach an equitable settlement between ENRC and the SFO and we want to engage with you to discuss a settlement in relation to Kazakhstan as soon as appropriate.”

“Note of my phone call to NG at 1650 today: I called NG on his mobile - he was in the USA. We discussed his client's position and where they are with reporting to us. Re Kazakhstan, they have largely completed the additional work on the stripping contracts and the more recent allegations about the CFO. The stripping contracts have been found to be consistently inflated/fraudulent by about 30%. The position with the CFO is that whilst they have found "unfortunate coincidences" the allegations have not been substantiated. His overall view is the there is insufficient evidence to amount to relevant criminality for our purposes (though some sort of civil action or referral to UKLA could be considered). However he said that his current report on these points is still in draft and is subject to: firstly a need for experts to agree; and secondly Board approval. He described the Board as nervous after Patrick's latest letter. In consequence he is seeking an extension of time to report properly to us towards the end of March. In respect of Africa he was vague but what he said was very interesting. He described the situation as complicated but more concerning for the Board. He said he thought that he had taken his work as far as he could without there being a risk to any investigation we might wish to carry out. I think this was in respect of risks of loss of evidence or by alerting potential suspects, but he was not at all specific. He said he would ideally like to come and meet us about this and explain further. I said I would relay all this to Patrick and we would get back to him. NG said he would be back in the UK 0730 on Thursday and would be keen to meet next week if at all possible (in addition to knowing our view on the delivery of the Kazakh addendum reports). My inference from what he said is that there is some real substance to the issues found in Africa, presumably in respect of the Camrose transaction and the cash payments previously flagged as unaccounted for. I would suggest that we agree our position and Patrick relays this to him when he is back in.”

“… He thought that he had taken his work as far as he could without there being a risk to any investigation we might wish to carry out. I think this was in respect of risks of loss of evidence or by alerting potential suspects, but he was not at all specific. He said he would ideally like to come and meet us about this and explain further.”

“I received another call from NG. He had called me as he had been unable to get hold of Patrick. He confirmed that his further report on Kazakhstan was not yet ready. I said that, having discussed it with Patrick, we were content for the report to be finalised in March. NG said that he had recently received further information from another whistleblower claiming that the management of SSGPO were behind the fraudulent stripping contracts. He also mentioned the involvement of the ENRC CFO's son in a company involved in a stripping contract. It was unclear exactly what the CFO knew but he repeated his comment to me of yesterday that there were a number of unfortunate coincidences. This will be addressed in the further report when it is finalised. NG then moved on to Africa. He said there were "massive problems on sanctions". It appears that the company has conspired to beach [sic] various sanctions and had even been dealing with sanctioned individuals until very recently. The previous engagement (i.e. information provided by Pierre Prosper in March 2012) with the SFO over the sanctions issues now looks as if it may have been misleading. He requested a discussion so that he could get a steer on whether to continue investigating this. NG then commented on the £35m cash payment linked to the Camrose take over and the promissory notes. He described the cash payment as a "corrupt" payment to Dan Gertler in which Victor Hanna (ENRC Africa) had connived. He described the arrangements around the promissory notes as "bemusing". He repeated his concern that he did not want to continue his work to the detriment of any future investigation by the SFO. NG also said that he now believes there are relevant e-mails and documents to which he has been denied access thus far. NG again repeated his offer of a meeting to explain the position in more detail I said that whilst this was potentially helpful, the SFO's position remained that we needed substantive reports to consider rather than verbal updates. I said I would relay the conversation to Patrick and his team.”

“Separately NG raised the issue of Africa: 1. They had identified significant evidence of wrongdoing. 2. They will be recommending to the ENRC board this Friday that 1 or 2 people be suspended pending the investigation continuing 3. Criminality identified in summary as follows: - OFAC sanctions breaches - Euro sanctions breaches - Bribe payments—Hard evidence that 35 million was given to Gertler, and material to suggest that this has gone on as bribes Main suspect Victor Hanna, UK resident, US national, Africa CEO Decherts want to give the SFO an update briefing on this, in advance of any report, as there are complications with ‘lawyers’ being involved, who appear to be aiding and abetting, and also misleading HMT and the SFO. Ideally they want to do this this month, particularly as they want to suspend 1/2 people, and do not want to jeopardise any subsequent SFO investigation.”

“So sorry Patrick. The client has been at six's and sevens. Apparently most of the press are on to it. I've finally agreed a short statement which says nothing more than we are investigating WB's and have reported matters to the SFO. See tomorrow. We have a Board meeting tomorrow and expect a rough ride. Will call you in the morning.”

“NG discusses proposed meeting On Wednesday 3 April There is a risk that Decherts may be sacked by the Board There is a further risk that the Board or at least several members of the Board may also be removed If meeting is to proceed Mehmet Dalman and Terence Wilkinson to attend along with NG The meeting is to be a presentation on Africa. As yet no report has been produced PR requests that a presentation is created in advance and that the full report be produced asap”

“I need to speak with one of you asap. We have just been visited by the SFO. I have tried to call each of you”

“We agree with the Court of Appeal in Masood v Zahoor…that, while the court has power to strike a claim out at the end of a trial, it would only do so if it were satisfied that the party’s abuse of process was such that he had thereby forfeited the right to have his claim determined. The Court of Appeal said that this is a largely theoretical possibility because it must be a very rare case in which, at the end of a trial, it would be appropriate for a judge to strike out a case rather than dismiss it in a judgment on the merits in the usual way. We agree and would add that the same is true where, as in this case, the court is able to assess both the liability of the defendant and the amount of that liability.”

“201 I am satisfied that if what Mr Gerrard was doing was unauthorised (a point on which I expressly refrain from making any finding) his lack of authority was not something of which the SFO was aware or ought to have been aware at any material time. I note that what Mr Gerrard is recorded as saying on occasions when his clients were not present was often repeated by him in their presence without demur. In any event, there was nothing of any substance in the records of those meetings or conversations which cast any light on whether litigation was reasonably in contemplation at any material time (especially bearing in mind that every one of those meetings post-dated 19 August 2011). Moreover, I did not need to rely on anything said by Mr Gerrard on any of those occasions, and did not do so, in order to form a view about the dominant purpose for which the Category 1 documents were created. 202 Even if I had been satisfied that the SFO was on notice that Mr Gerrard was acting without authority at any material time, it would have made no difference to the exercise of my discretion regarding the granting of declaratory relief. The Disputed Documents are either privileged, or they are not. If they are privileged, ENRC does not have to disclose them in response to a section 2 notice. If they are not, it must disclose them. The question whether Mr Gerrard was or was not authorised to do or say what he did, has no relevance to the issues of privilege that I have decided. Any lack of authority on his part would be no justification for refusing the SFO the declaratory relief to which it is otherwise entitled.”

“We are all to blame. Better to verbally report. Put advice in writing at start. Was a problem. Told them what they needed to do. Tried to sack me. Another law firm comes in to give a second opinion […]”

“in [???] with regulators At a certain point, become co-conspirator v aid and abet they are there under new Act [Bribery Act] if recognise issues, co & they themselves can be criminally liable. At a certain point, become co-conspirator v aid and abet 943. Running risk of getting convicted.”

“36. NG explained that there is a concern that shareholders might sue for negligence as ENRC cannot control SSGPO. The AC can also be accused of “aiding and abetting” the fraud and under the Bribery Act 2010, ENRC and the AC could be held liable for “wilful blindness.”

“POTENTIAL CONSEQUENCES OF FAILURE TO FULLY INVESTIGATE If a regulatory investigation were to be commenced by one of the government agencies in the UK or the USA and/or civil litigation commenced by third parties, it is likely that the Audit Committee will be asked what steps it took to investigate the allegations of which it was aware. If third parties believe that the AC ignored or failed to properly investigate serious allegations of misconduct, this could result in litigation and/or a regulatory investigation against ENRC plc and its directors (including non-executive directors). Additional consequences could include any of the following: 1. Breaches of the Companies Act 2006, including for example breaches of directors' duties including, criminal charges for inaccurate accounting and record keeping; 2. Possible derivative civil claims by shareholders against individual directors; 3. Significant reputational damage and drop in share price; 4. Suspension of trading of ENRC pic shares; 5. De-listing of ENRC plc. We should make it clear at this stage of the investigation that we are not saying that ENRC plc or its directors are guilty of any misconduct. However, the real risk to ENRC plc is the threat of a regulatory investigation which, from our experience, can take a number of years, is hugely disruptive and expensive.”

“[t]his risks looking contrived. Also think that we risk losing control. Let’s discuss.”

“… I just had a discussion with Jim Cochrane… about a potential raid vs a self reporting (as we discussed on a daily basis the last couple of weeks). Jim would like to talk to you to get your opinion from first hand, hence he will call you on you mobile shortly. We need to come to a decision ASAP whether we want to do a self reporting or not.”

“Expecting a raid. Am saying to company you need a full investigation. SFO will know. Whether we sit tight and wait. When not if they get raided. Should go to SFO. Say a problem. Whistle-blower + review. Do a thorough investigation. Will keep you posted…report fully and put in processes. Being seriously considered. Issue is just want to report on Kazakhstan. Think they can manage the end result. More manageable than Africa. Africa difficult. Beat is new and largely unaware of the concerns.”

“Dawn Raids by UK Regulators 7.5 The possibility of a raid by a UK regulator remains, given recent publicity. Consideration should be given to self-reporting this matter to the Serious Fraud Office to reduce the likelihood of such a raid. Dechert has given comprehensive raid training to manage the risks of a raid should it occur.”

“GA - Would like to close under certain [??] tomorrow. NG - Dangerous to close tomorrow. BE - We have to report to SFO. NG - Massively dangerous. Dangerous as it is. May want to crawl over everything you've done. We want to be careful.”

“NG – MD asked how serious, 1 to 10. Said [to] 10. Been in vetting. Looking at you for some time. SFO staggered going to voluntary report. Consequences. Complete review. No evidence of wrongdoing. Best case civil settlement, next best case pleading + settling. Might be able to manage a DPA. Worst case we mislead them. They will then prosecute […] Guilty under S7already—Can’t pass adequate procedures. Any [vagueness]—no adequate procedures. Told JD not good enough. Latest 12 months. If we go in w/ offences can tick a lot of boxes. [First] one under Section 7 Got to go into negotiation + show adequate procedures PwC— JD giving [same] [message] to company? NG— Don’t have white collar/SFO expertise… SFO won’t accept JD as not independent… …They are litigators…”

“The most relevant parts for you to focus on will be section 6 (Bribery of foreign public officials) and 7 (Failure of commercial organizations to prevent bribery) of the Act, and pages 8-31 of the MoJ Guidance. You will recall that section 7 of the Act creates a strict liability offence for organisations which can be held responsible for the actions of employees, subsidiaries, joint ventures and other third parties who perform services for or on their behalf anywhere in the world. If a bribe is paid, the only defence available for the organisation is to be able to prove that it had in place "adequate procedures to prevent bribery". Pages 20-31 of the MoJ Guidance sets out the Government's view of what comprises "adequate procedures". One final point is that jurisdiction under the Act is extremely wide. Section 7 in particular extends to any company incorporated in the UK and/or any company (wherever incorporated) which carries on a business, or part of a business, in any part of the UK. If an organisation is caught, the nationality of the individuals involved, and/or the location of the misconduct is irrelevant. The Serious Fraud Office ("SFO"), has said that in its view, the Act gives it extremely wide jurisdiction. For example, Richard Alderman has stated that where one company in a group is incorporated or operates in the UK, the SFO will claim jurisdiction over all companies in the group wherever in the world they are located.”

“HS also said she would know what Gertler was doing. Make sure fully aware of cash in and out. Did we do all of those things? Did we check money in and out? Have you been wilfully blind. Biggest worry. I A reports expressed concerns. VH says other institutions have looked at it. If anythings happened its a problem for us. We inherit liability BA 2010. UK entity could easily be liable for sins of Kazakh or African entity. On our watch. If it is, and they can prove that, do we have appropriate systems + controls in place. Company guilty under bribery act. That is what we are trying to build at the moment… Pushed to demonstrate adequate procedures [re] bribery post July. Think stuffed. Should try. We might want to give it away. Bigger problem of wilful blindness Might agree to minor corruption, might agree to a section 7. Disappointing. Main job to ensure no bigger problem for board… They want to check whether board acted on wilful blindness point…”

“87. On 2 February 2012, Mr Gerrard met representatives of ENRC and Ambassador Pierre Prosper and Judge Stephen Larson of Arent Fox LLP to discuss the scope of the investigation that ENRC ought to try to agree with the SFO. Arent Fox LLP had been engaged by ENRC to advise on whether there had been any sanctions violations. There was a discussion as to whether the acquisition of Camec ought to be within scope of the investigation. Mr Prosper suggested that ENRC should attempt first to establish the SFO’s position on such matters in order better to understand how to deal with the SFO. Mr Gerrard responded aggressively, saying words to the effect: “I don’t appreciate having you guys [Pierre Prosper and Stephen Larson] parachuted in … you two fuckers [ENRC’s representatives] parachute these guys in … this is my world”. 88. Mr Gerrard then advised that: (a) “if we don’t investigate everything ENRC will be raided”; (b) he did not “know how long [he] can hold [the SFO] off”; (c) “…if I don't deliver – and I've repeated this fucking hundreds of times – if we don't deliver fraud or corruption...we've got no deal”; and (d) ENRC would be better to admit to wrongdoing, even if there was none, to achieve settlement with the SFO.”

“At one point he [Mr Gerrard] pointed his finger at Victor Hanna and me and shouted something to the effect: "you two fuckers have parachuted these guys [ie Arent Fox] in...". He then turned towards Judge Larson and Ambassador Prosper and continued shouting "...this is my investigation! Go back to the US, I'm in charge here...". These phrases stick in the memory because Mr Gerrard's language was so combative.”

“We advised that the board could end up incurring potential liability for sins of past. Any third party would ask why never got to the bottom of it… You asked me where we are. Scale of 1-10. This is 10. Sortable, yeah. Sorted worse. Will we get a bloody nose. Good result would be getting on to voluntary report program of SFO and achieving a settlement. Civil settlement. Independent chairman, achievable. Will have to prostrate yourself. Significant fine. Already [breaking] [law]. You can't show you have adequate procedures. Not taking into account Kaz or Africa. MD - Last board meeting said coming to an end + going well. NG - Going well in you haven't been raided. SFO staggered you walked in. Prepared to raid you. MD - Who? NG - The Company… For first time, getting a plan. 5 March is vital. If not on voluntary report. If not a raid + a criminal process. Evidence from Internal reports and [advisers]. Not legally privileged. All admit criminal offences. No ones going to do a deep dive. They may suspect worse has happened. We can be pragmatic in approach. Worst. Widespread. Did Halliburton. They confessed corruption. Narrow. Here all over the place… If we get on self report. Direct line to civil settlement. Convinced provided we tick boxes. Will require you to meet and do your bit. [Settle]. Unpleasant. Current director leaving in April. He is [???] convinced civil. Lead investigator know well. New guy a prosecutor. If we can't deal w/ the 5th we have a problem.”

“CAUSATION, LOSS AND DAMAGE 179. Dechert's and Mr Gerrard's breaches of duty identified above caused ENRC loss and damage. The first three heads of loss identified below were a result of the investigation carried out by or under the control of Dechert being far more extensive than was reasonable in the circumstances. All eight categories of breach identified above caused the SFO to have wider or more serious concerns than was appropriate and/or caused ENRC to sanction more extensive enquiries than were required, which in turn caused or permitted the ever widening investigation. The fourth head of loss arises out of the sixth category of breach identified above, namely failure to protect ENRC's privilege. (1) Unnecessary legal fees 180. Dechert's and Mr Gerrard's investigations were of greater length and/or complexity than was necessary and/or otherwise required. The vast majority of the fees paid by ENRC to Dechert in respect of work done in the period September 2011 to March 2013 were unnecessary. But for Dechert's and Mr Gerrard's breaches of duty, the work undertaken by Dechert and Mr Gerrard for ENRC would have been much more limited. In particular: 180.1. Had Dechert and Mr Gerrard not breached their duties as set out above, then ENRC would not have agreed to enter into the process with the SFO as advised by Dechert and Mr Gerrard. Instead, ENRC would have sought to limit, so far as possible, the extent of work promised to the SFO to prospective work to: (a) improve ENRC's systems and controls; and/or (b) the completion of FRA's books and records review in Africa; and/or (c) a limited review of the due diligence associated with the Camrose and Camec acquisitions, to involve interviews with professional advisers, members of the board and senior management. 180.2. Further or alternatively, had Dechert and Mr Gerrard not breached their duties as set out above, they would not have continued investigations in Kazakhstan beyond October 2011. 180.3 Further or alternatively, had Dechert and Mr Gerrard not breached their duties as set out above, ENRC would have exited the Review Process and/or ceased to provide a running commentary on the investigation to the SFO and/or sought to limit the ongoing steps promised to the SFO to those set out in paragraph 180.1(a)-(c) above, prior to 27 March 2013, and at least in or about April 2012 (as pleaded at paragraph 158B.4 above), alternatively November 2012 (as pleaded at paragraph 158C.4) above… (2) Unnecessary third party fees 184. ENRC had to engage third party law firms and/or other third party professional advisers to advise and assist on matters concerned with Dechert's wrongful conduct of its investigation (during the Retainer). Such law firms and advisers included Addleshaw Goddard, Arent Fox, Bridge2, Deloitte, FRA, Herbert Smith, Jones Day, KPMG, PwC, and The Risk Advisory Group, to whom ENRC paid very substantial fees. But for Dechert's and Mr Gerrard's breaches of duty, ENRC would not otherwise have incurred such fees and costs and/or not incurred them to the same extent because ENRC would not have engaged such third party advisers and/or the work and advice of such third party advisers would have been more limited in scope and duration… (3) Lost management and employee time 187. Dechert's and Mr Gerrard's breaches caused significant disruption and/or delay to ENRC's business. In particular, ENRC's management and/or employees lost and/or wasted valuable time and work responding to and/or otherwise engaging with Dechert and Mr Gerrard (acting in breach of duty), including investigating and mitigating the effects of the problems caused by Dechert and Mr Gerrard. As a result, ENRC's management and/or employees were diverted from their normal work duties and/or diverted their work time which would otherwise have been spent on developing and/or promoting ENRC and/or the ENRC business and/or generating revenue for ENRC… (4) Legal costs in connection with SFO proceedings 190. Dechert's and Mr Gerrard's failure to seek or agree terms of reference with the SFO has caused ENRC to become embroiled in litigation with the SFO about the status of various documents. The claim and appeal described in paragraph 152 above could have been avoided if ENRC had been properly advised and represented in relation to its dealings with the SFO. In particular, the dispute would not have arisen if Dechert had, at the outset, sought the SFO's agreement as to what information and documents would be provided by ENRC to the SFO during and at the end of ENRC's investigations, as to whether such information and documents would be commonly understood by ENRC and SFO as attracting privilege and as to whether, and if so when and to what extent, ENRC would be treated as having waived any such privilege. 191. ENRC claims as damages for breach of contract (against Dechert) and/or negligence (against Dechert and Mr Gerrard) such costs as ENRC may ultimately have to bear in connection with the SFO's claim, which could have been avoided by an early agreement to terms of reference.”

“… The investigation should be limited to the whistleblowers allegation and…new findings should be considered as a new investigation and goes through our investigation policy first before we do further investigations. We have do avoid that this investigation never finds and end…”

“ENRC Clarissa made contact to tell me that she had had an email from you which questions my authority to have asked Dechert to carry out the search I requested recently. This leads me to believe there may be some confusion as to my brief, the Addleshaw Goddard brief, the role of acting Deputy General Counsel and the Dechert brief. DECHERT I understand this to be, within the scope of instructions given from time to time by or on behalf of the Company, to carry out Investigations into matters which have been brought to or come to your attention, with a view to delivering a Report on behalf of the Company to the SFO in relation to any possible criminal activities. I know that your advice on what should be investigated, how and by whom, is both valued and respected; not least because of your vast experience in such matters, but, as I understand it, there is no carte blanche to run the Investigation without accountability. You are aware of my view that, in part due to the permanent overhang of your Investigation, and the delay in getting on and interviewing key executives, the Management of the Company is dysfunctional. In my view, what we all need to avoid is any feeling or impression that the Investigators are running the Company rather than simply the Investigation. I was encouraged that your agreement to Internal Audit carrying out the investigation into the Whistleblower Allegations concerning the Aluminium Company in Kaz, signified a recognition that we have to draw the line somewhere. ACTING DEPUTY GENERAL COUNSEL Simon Zinger had been diverted almost exclusively to SIC matters and left on short notice. AG agreed to temporarily fill the gap at short notice and Clarissa Coleman was seconded in with Louisa Caswell to assist her. She has secured delegated authority on terms which I believe she is comfortable with enabling her to liaise with and, whenever appropriate, instruct Dechert on a day to day basis so as to ensure that it is able to carry out its role to the Company's satisfaction. ADDLESHAW GODDARD Our firm is carrying out a number of assignments in the ordinary course of business, some of which are likely to have no bearing on or relevance to the Company's voluntary report to the SFO – including a number of employment related matters. MY ROLE This is a fairly wide brief but specifically includes monitoring Dechert's performance of its role (where I hope you will have experienced a fairly light touch), and giving strategic advice to the SIC and to Mehmet in his capacity as Chairman of the Company. It was absolutely implicit in this role that I would have access on demand to any documentation which I considered it appropriate to ask for whether from Dechert, the Company or anyone else, which is why I have been able to fast track the supply of information (all shared instantly with Dechert) on those matters I identified months ago as requiring scrutiny (Todal, CCC, Comide, Sabot),If you feel you need an express written authority from the Company to Dechert to deal with my document requests I will get it to you. I am happy to share with you the fact that, in my role, I have identified a list of executives who, in my opinion, would need to go and have tendered appropriate advice to the Chairman and shared that with the Chairman of the AC. I regard it as vital that the shareholders, the other stakeholders and the SFO realise that there is a determination to change the culture from top to bottom. As important, we need to get to a point quickly where the Company is being run by its Management. On that last point you will recall that at the last SIC meeting I registered my view that the debate we were having about a further $25M being injected into Metalkol/Comide demonstrated the dysfunction caused partly by the Investigation. It should have been a decision for the Managers. By the same token the suggestion which was recently relayed to me in confidence, that there may have been something irregular concerning the education/employment of the GFD's stepson, is a matter which in my view needs to be looked into by the Company without delay and if there were anything, and it went beyond an internal disciplinary issue, then it should be discussed with you and your input sought and considered. Now that you hopefully have a better understanding of the scope of my role, I trust you will accept that your repeated demand to be told from whom I have received instructions might be viewed as inappropriate. My instructions are to see what evidence there is to substantiate the allegation. In the interests of saving costs I asked Dechert to carry out the email searches, which I communicated to you last Wednesday. I trust Dechert have completed that exercise as requested. Please tell me by return whether anything has been found which might substantiate the allegation. I think you are aware that the Chairman, for his own protection, has asked me to co-ordinate the initiation of a Disciplinary Procedure based on the two issues that have already been identified. He agreed with me, however, that we would defer that for a very short time to see what evidence there may be to substantiate the allegation. An immediate response from your firm is therefore imperative.”

“If you don't set clear boundaries to Neil he feels free to broaden his investigation to an extent which is damaging for the company, both in terms of cost and, moreover, time. I can't imagine that's what the SFO would expect from us, especially since the former director Alderman stressed the principle of proportionality.”

“My understanding is that the data present in Bryanston for the primary custodians we identified for you last week has now been imaged / secured in South Africa by a local company employee but under the supervision of an independent third party specialist who will be able to provide a certificate confirming the process undertaken if this is needed. My understanding is also that the image has been deposited with the company's South African lawyers, Bowman Gilfillan in an escrow account for safekeeping. Our understanding is that it is not possible to take an image of the whole of the e-mail enterprise vault but that individuals' e-mail accounts must first be extracted and then imaged which is why we are securing by custodian at this stage. Can you please confirm to us the name of the third party who verified this process and also ask Bowmans to confirm that they are now in receipt of the data? My understanding is that the image taken for the primary custodians will go back to all data for those custodians on the e-mail / document and accounting servers for the period from 1 January 2010. We still believe that the company should be imaging from 1 January 2009 just in case there is any relevant e-mails on the Africa servers only in relation to the 2009 Camec transaction, whilst recognising that they will be limited as, again, the primary people involved in the acquisition of Camec were London or Zurich based. We will provide you tomorrow with a list of those whom we see as "secondary custodians" who relate primarily to the post acquisition red flag issues and whose data we would also ask to be secured / imaged with independent verification of process and deposited with the company's local lawyers. We are unable to identify any further potential custodians of potentially relevant e-data which may be on the South Africa server until such time as Africa HR is able to respond to the e-mails sent to Beat earlier and forwarded to Victor asking for information regarding who made up part of local management teams and where they were located so that IT can identify where their e-mail accounts are located. There is a further issue in relation to Chambishi where our understanding is that potentially none of the local data is located in Bryanston but may be located still in Zambia. Can further investigation please take place as to where this material is located so that this too can be secured. I acknowledge that in respect of all of the above points, the reality will be that a substantial part, or perhaps all, of the correspondence and documentation relating to the acquisition process may be located on the London or Zurich servers because that is where those primarily involved in the transactions were located but it is important that the data is secured for now in case it is discovered from the review of the London-Africa data that there were active participants with African locations and where it is thought necessary to run search on agreed search terms across an agreed set of e-mail custodians.”

“Q. And that all the disclosures that we see over various meetings […] and we have looked at some examples on 5 March and there are other examples on 20 July and 28 November which we will come to in a moment, come to a bit later those disclosures of at least red flags within ENRC, full and frank disclosure of those matters was in your view and as far as you were concerned, that of the board, in the best interests of ENRC? A. In general, yes. On specifics, every red flag I wanted investigated before it became reported, because you can’t report every single red flag , because when you are in emerging markets, you are going to have a lot of red flags . So we wanted to have some focus and scope in various topics that we wanted to discuss with SFO that whatever we decided in the board, it would be full and frank.”

“Q. …And taken as a whole and looking at it now, addressing what you see now and how you think about it now, it is fairly obvious is it not that telling Mr Thompson those things about his concerns about the client’s willingness to be full and frank couldn’t have been in the client’s interests at that point. Do you agree? A. I think that is one view. As I said earlier , I think also that alternative view that Mr Gerrard was trying to build a rapport or what he might perceive as a close relationship with us whereby he thought that we would trust him and in terms of making a statement like that, he was trying to sort of give us confidence that they would be -- he would encourage them to do the sort of fullest self report that they could. Q. Right. But I think you would agree, would you not, that a solicitor can’t build rapport at the price of his own client’s interests ? A. I think that’s right. I think -- I mean, again, I am not a defence practitioner but I would have thought that one would ordinarily discuss that strategy with one’s client in advance of adopting it.”

“SUMMARY… There are therefore significant risks inherent in engaging in the voluntary disclosure regime including the loss of privilege and confidentiality in the documents that must be provided to the SFO as part of the process. Further, unless specific agreement is reached to the contrary, the SFO will have considerable freedom to use the documents disclosed including to share them with other law enforcement agencies (here or abroad). Whilst, in principle, limitations can be agreed in respect of the documents disclosed, as a matter of practice, the Company is unlikely to be able to get the SFO to accept all the desired limitations… THE POTENTIAL RISKS… “3. there is a real risk that of losing privilege and confidentiality in any documents it discloses to the SFO in the course of complying with the voluntary disclosure regime. Loss of Control over documents… As set out below, engagement with the self-reporting procedure carries with it a very real risk of loss of privilege and confidentiality in sensitive documents. Whilst, as set out in Section F below, this risk can be managed to an extent, it cannot be eliminated. RECOMMENDATIONS… At this stage, we would not recommend that any documents be disclosed to the SFO prior to the establishment of a formal position between the Company and the SFO. In the event that disclosures are made either as part of the self-reporting process or otherwise (and, if otherwise, such disclosure to be assessed based on the specific circumstances at the time), ideally, the Company should seek to exclude privileged documents from the scope of any disclosure and to agree strict limits on how the SFO may use any other documents disclosed to it. It is too early to advise specifically on these disclosure issues and what approach the Company should adopt. We will advise you further after the initial meeting.”

“…-Although we are never likely to use the “report” as it will contain hearsay evidence and commentary, we will want to use it to get further information in, we may need to disclose it to any defendants in any later prosecutions, and we may need to disclose it to MLA [mutual legal assistance] authorities.”

“… The basic position is that without the Dechert material we currently have very little other than supposition and, more importantly, there appears little chance of us getting much in the way of evidence from the usual channels. The proposal is not without risk, as Dick correctly highlights, but by keeping the criminal route open for individuals [i.e. as opposed to the company] and taking a robust line on any Part V points, a defensible outcome could be delivered.”

“Section 2(3) of the Act of 1987 does not expressly limit the documents in relation to which production can be demanded to documents which are in the possession or under the control of the recipient of the notice. But it must be clear that, if the recipient of the notice cannot, directly or indirectly, procure the production of a document he must have a “reasonable excuse” for not producing them.”

"We keep in touch with all key regulators. If you check with the SFO, they will refute that there is a formal investigation into ENRC."

"We cannot confirm or deny that we are investigating."

"The original owners' historical links with directors and senior management meant that their influence would be ever present."

"At the request of shareholders and given the current volatile market conditions, we deem it appropriate to reconsider the timing of this acquisition."

“Call me urgently. More leaks.”

“uncomfortable reading”

“• Dechert's general conduct — accusatorial interviews and threatening behaviour (senior management complaints) and professional conduct towards other law firms. • Lack of strategic overview — e.g. repeat of electronic search, no clear direction on search terms or document requests; No clear strategic plan to complete the investigation leads to extension of the remit. • Lack of Commerciality — no understanding of commercial needs of the business (eg CCC merger interview issue). • Inability to ask straight questions; • Too much reliance on forensic professionals without questioning or directing their role.”

“1. An opaqueness about the "off the record" discussions with SFO contacts and exactly what the SFO were or were not being told and vice versa. 2. Consistent criticism of and consequently tension with other professionals particularly where the involvement of others impinged on Dechert's assumed total control of the Investigation e.g. from time to time , PWC, KPMG, Herbert Smith, Jones Day, and Addleshaws. 3.The impression that NG may now be leading other matters and, without authority for this, Duncan may de facto have assumed the leadership. e.g, very surprised that NG apparently took no part in the ZZ Interview this week given what may be at stake. 4. A lack of flexibility about their standard interview process which seems to involves every possible avenue being covered in advance by massive document review exercises and engagement of outside professionals (FRA)which is bound to have led to some blind alleys. e.g. based on what we already know VH should have been interviewed and re-interviewed over the last 2 months at least and, if so, might have "hung himself" by now. thus possibly cutting through all the "crap" and saving a mass of time and expense. 5. For me the biggest strategic failure is to have failed to recognise, which others did, that the biggest risk was that the SFO under new Directorship, and applying a new approach to voluntary reporting, would use delay as an excuse for resiling from the tacit understandings that NG obviously believed he had with the SFO.”

“ENRC internal inquiry raises suspicions MARCH 14, 2013 by Christopher Thompson An internal investigation into whistleblower accusations at the FTSE 100 miner Eurasian Natural Resources Corp has raised suspicions over whether it made $l00m in "fraudulent payments". A draft presentation to the Serious Fraud Office prepared by Dechert, the US law firm that carried out the inquiry, raised concerns over payments totalling at least $100m over four years. It cites contracts given to a company with apparent links to Zaure Zaurbekova, ENRC's chief financial officer. In one example, a company incorporated by Ms Zaurbekova's son, Bulat, was said to have won three contracts for stripping work - the separation of metal ore from the waste materials dug up at mines - worth $10.3m between September 2010 and May 2011. It adds that Ms Zaurbekova's son sold the company in September 2009, although its registered address continued to be a flat owned by Ms Zaurbekova in Almaty, Kazakhstan's largest city. In February Mehmet Dalman - the former investment banker who was appointed chairman a year ago with the primary task of improving governance at ENRC - gave a report of the investigation to the Serious Fraud Office. The company declined to give the Financial Times a copy, but it said: "[ENRC] takes all whistleblowing allegations seriously, and it is of paramount importance that they are thoroughly investigated. The company is currently in a reporting process with the SFO and therefore is unable to comment on ongoing investigations." ENRC is awaiting news on whether the agency will conduct its own investigation or let the matter drop. The miner has been plagued by boardroom rifts and concerns over governance since joining the London market in December 2007. The founders of the business, Alexander Mashkevich, Patokh Chodiev and Alijan Ibragimov, together own 44 per cent of the company's shares. Aside from the whistleblower claims at ENRC's Kazakhstan business Sokolovsko-Sarbai, known as SSGPO, the company became embroiled in a fierce legal dispute in the Democratic Republic of Congo over copper assets with rival miner First Quantum Minerals. The dispute was settled for $1.2bn. Mr Dalman's arrival was predated by the high-profile dismissal of former GlaxoSmithKline boss Sir Richard Sykes and investment banker Ken Olisa - the latter who described the miner as "more Soviet than City". The Dechert draft listed the difficulties the investigation team allegedly encountered, including the construction of a false office, an unnamed employee using a specialist computer wiping tool and a refusal to co-operate on the part of outsourcing companies and contractors. It also referred to allegations of "endemic fraud" in relation to procurement. Ms Zaurbekova and her son could not be reached for comment.”

“Contract stripping companies affiliated with the Chief Financial Officer, Zaure Zaurbekova- Contract stripping companies previously owned by son and brother of CFO hastily transferred to friendly nominee Lack of related party disclosure to board and regulators, including collusion of SSGPO president with family in law member and major shareholder Alijan Ibragimov…. Quantum At least USD100 million in fraudulent payments over 4 years.”

“thanks for a lovely lunch on Friday. Great to catch up, as always. I had an unexpected invitation from Miriam to the Deputy PM’s office this week so if you had a hand in that, I thank you.”

“In principle, the hair may have become affixed to the Brown Envelope at any point in time before we received it, including while it was in the SFO's custody. Nevertheless, forensic testing of the hair may provide evidence as to the identity of the person responsible for sending the Brown Envelope to the SFO. We therefore propose that the Brown Envelope should be made available to a suitably qualified expert to carry out a comparison of the hair to Mr Gerrard's hair and the hair of his personal assistant(s). In circumstances where our client has no samples of these individuals' hair, ENRC is willing to make the Brown Envelope available to an expert of your clients' choosing (subject to ENRC's prior approval of the expert's credentials).”

“As you acknowledge, "the hair may have become affixed to the Brown Envelope at any point in time". Accordingly, our clients do not accept that "forensic testing of the hair may provide evidence as to the identity of the person responsible for sending the Brown Envelope to the SFO." Given that the results of any tests on the hair would carry no evidential weight, our clients decline your client's proposal.”

“London July 2012 Dear Mr Green, I am writing to you anonymously because I fear my career will be ended if I am identified. This note concerns allegations made by a lawyer called Mr Neil Gerrard. Even if partially true they make a mockery of the operational independence of the Serious Fraud Office and its ability to effectively investigate. My only regret is that I did not write sooner, I hesitated because "whistleblowing" against a colleague is not something that comes easily. I now realise that to delay was wrong. A few months ago I was in the company of Neil Gerrard as part of a fairly large group; mainly lawyers. During the evening he was holding forth about on number of different issues. Whilst admittedly the worse for wear, he made the following assertions/allegations about the Serious Fraud Office and about you. I managed to record about 60% on my BB and although there is a lot of background noise his voice is perfectly recognisable and what he said is perfectly clear. Summary: 1. He claims to be given "insider information" on companies and individuals that are the subject of Serious Fraud Office investigations. His main contact is an individual identified as "Dick". He made the joke that this man is "the only Dick a lawyer ever needed". This information includes central allegations, copies of case notes and the Serious Fraud Office investigation strategy. Gerrard then uses this information to obtain instructions from the party being investigated. Specific cases he mentioned were a company called Alstom: and Bernie Ecclestone. At the time he claimed he knew that the Serious Fraud Office going to investigate the Barclays LIBOR scandal and he was using that information to "get instructed shortly". Regarding Ecclestone he also claimed to have high-level contact in the relevant department of the Revenue whom he "did deals with" to get clients "off the hook". He alleged that he was warned by the Serious Fraud Office that there was a "multi agency" investigation into a number of leading law firms in London including Eversheds. He claimed to have "fucked" any relationship the law firm Jones Day may have with the SFO by "judicious leaking". 2. He claimed that this insider information was provided with the tacit agreement of yourself and Dominic Grieve, as there was "nothing more satisfying" than a guilty party paying for an investigation into their own wrongdoing. 3. He claimed the Serious Fraud Office was inept and toothless and could only investigate seven or eight cases a year. As part of “the agreement” with your office he could guarantee that his clients would never be investigated and that he could change a criminal investigation into a civil settlement. He cited the case of Haliburton whom he apparently represented recently. He claimed that he had "negotiated" the Serious Fraud Office into agreeing a £9 million civil settlement as opposed to the $US 750 million criminal judgment in the US. 4. He claimed that via Miriam Gonzales his legal partner he had direct access to Nick Clegg and the heads many European governments. He had the ability to influence and in some cases change government policy. He described to us "in confidence" how he had been asked by Dominic Grieve to oversee and guide changes to UK regulatory strategy with the aim of giving the Serious Fraud Office the "kick up the arse" it needed. 5. Turning to you personally he said of your recent appointment that you were "very much second choice" and that he didn't accept the post "this time round" as he couldn't afford "a pay cut". He claimed that you were "keeping the seat warm for him" and when he takes over from you in 2016 Dominic Grieve had guaranteed him £250,000 a year salary as opposed to £150,000 and an elevation to the House of Lords as opposed to a Knighthood. These are the key allegations. Whatever the truth or otherwise a number of us were appalled that despite being obviously drunk he should speak so openly, especially as it appears that he is receiving confidential and commercially sensitive information from contacts in the Serious Fraud Office. I cannot come forward publicly as my career would be ended. I have instructed a French law firm (I cannot do this in London) to try and identify how I might release a copy of the audio recording to you without my identity being compromised.”

“I'm afraid with everything else going on I have not yet drafted the response to this - will do it tonight/tomorrow. However DGQC and I discussed it last Friday and agreed the general content of the response - to the effect that a great deal of the letter is defamatory; furthermore some of it is demonstrably false, other parts are not capable of verification by ourselves, and in respect of the remainder, some effort had indeed been made to look into the allegations but without resulting in standing them up. Neil Gerrard is a lawyer known to this office and to an employee called Dick, however none of the speculation/comment about their alleged conversations can be corroborated and there is little reason to give them credence in the context of the other outlandish claims. The fact that the letter is anonymous means that we cannot probe further or assess the motives of the correspondent so there the matter rests unless and until the person comes forward. The AG may very well have been apprised of this letter before - it was first received here last July and has subsequently found its way to us at least twice more via third parties. I think I may have seen it myself whilst at AGO. But, given the fact that preposterous statements are attributed to him, I want to make sure he's aware that it now appears to be doing the rounds amongst journalists. If, of course, it turns out that the AG has in fact promised Mr Gerrard a knighthood and/or the DSFO job at £250K pa, doubtless you'll enlighten me!”

“On 4th June I was handed a posted envelope by an SFO Messenger containing a copy of an 8 page letter dated 12 April 2013 from Neil Gerrard of Dechert LLP to Beat Ehrensberger (General Counsel for ENRC) and other papers. There was no accompanying letter from Dechert with the papers but one has to assume that the papers were submitted in compliance with the Section 2 Notice served on Dechert on 14th May 2013. The letter was written after Dechert had been de instructed by ENRC The terms of the letter concerned refutations by Dechert of allegations, by ENRC against Dechert, inter alia of: • That there had been unauthorised disclosure of privileged and confidential information to the press. • Inappropriate communications with the SFO • That the Dechert investigation had been conducted improperly and unprofessionally • Retaliatory Action by Dechert against individuals in ENRC • Improper Billing Dechert maintain that the allegations are unfounded. Enclosed with the letter are a number of documents which are marked Legally Privileged - "prepared for the purpose of obtaining legal advice" They include copies of slides presented to the SFO in July 2012 by Dechert. The enclosed documents relate to allegations of wrong doing in Kazakhstan (which at this stage are unlikely to be investigated by the SFO). The accompanying letter makes brief reference to the 3 Congo entities (foot of pp 5 and top of pp 6) which could form part of the SFO's investigation. It would of course be helpful to see Dechert's work on Camrose Resources, Camec and Chambishi, all three being Congolese entities and all three we will have an investigatory interest in. Dechert was going to refer to their work re the Congo at a meeting on April 3rd with the SFO, but by then their services had ben dispensed with by ENRC and switched to Fulcrum chambers. Clearly this material ought to be put on to our data base.”

“Confidential-Keith McCarthy’s Note Books: Volume 1 - 0 4 December 2009 - 02 February 2010 Volume 2 – 22 February,2010 – 20 September 2010 Volume 3 – 02 August 2010 – 16 December 2010 Volume 4 - 10 January 2011 – 21 July 2011”

“Firstly, I have managed to locate some further papers that Keith held on… so please let me know when you are at your desk so that I may pass these to you personally. Secondly, I have recalled the archive box in which Keith's 'note books' are held. Having now gone through them, the only reference I can find in relation to…is as follows, and there is no reference made to where this note book entry came from or who (if that is the case) he was discussing it with… This is in the notebook 'Vol4' dated 10 Jan 2011 to 21 July 2011. I do not have or have I had access to the note book that follows on from this which would take you up to Keith's departure on 09 December 2011.”

“Find me a solution to this!”

“… The relevant pages that Keith McCarthy is requesting from his SFO notebook (Volume 5) which SFO is not in possession of. Sam Carlyle… Recalls archiving 5 volumes but when she had occasion to recall them for a previous SFO SMT enquiry there was 1 missing. It does not appear that this was officially reported but Sam can give the full details….”

“ENRC PLc 25 April 2013 The Director of the SFO has accepted ENRC Plc for criminal investigation. The focus of the investigation will be allegations of fraud, bribery and corruption relating to the activities of the company or its subsidiaries in Kazakhstan and Africa.”

“The focus of the investigation is allegations of fraud, bribery and corruption around the acquisition of substantial mineral assets in Africa.”

“We refer to your letter dated 24 March 2015. Your letter is predicated on an assumption that the SFO has made a decision formally to end its investigation into your client's affairs as they relate to Kazakhstan. That is not the case. Rather, as we indicated during the course of our meeting on 19 March 2015, our present focus has been, and remains, on your client's African operations. You will appreciate, however, that our investigation is not yet concluded and we will continue to pursue all reasonable lines of enquiry. For this reason, whilst we are content to confirm that we are not at present actively investigating your client's Kazakh operations, we cannot confirm that we will not do so at some future point. In the light of this, your other requests are inapplicable.”

“We refer to recent correspondence between the SFO and your solicitors — Debevoise & Plimpton LLP. We confirm that we are not at present actively investigating any of your operations in Kazakhstan.”

“We have just spoken. I will try to ensure that we confirm the correct wording of the SFO investigation into ENRC 'case information' on the new website. Please make sure that the new wording you propose is not published on the new website without the express agreement by me and Matthew Wagstaff. As I explained we should have agreed wording for you by Friday 15th May in any event.”

“Limiting Dechert LLP's liability to you Our maximum liability to you in relation to this matter will not exceed £3 million. By signing and returning a copy of this letter to us you confirm that you understand and accept this. Please let us know if you would like to discuss it further. We draw your attention to the limitations of liability in our Terms of Engagement, attached as an appendix to this letter, particularly where you have agreed a limitation of liability with another professional adviser acting for you on the matter. This letter does not amount to a contentious business agreement within the meaning of the Solicitors Act 1974. You understand that the consequence of that is that first, your statutory rights to challenge our costs is not limited by section 60 (1) of that Act and second, our ability to agree with you a limit on how liability is not affected by section 60 (5) of that Act. Complaints If you are unhappy about any aspect of the service you have received, or about the bill, please contact me or Senior Partner in London.… You may also have a right to object to the bill by applying to the court for an assessment of the bill under Part III of the Solicitors Act 1974.”

“32.— Postponement of limitation period in case of fraud, concealment or mistake. (1) Subject …below, where in the case of any action for which a period of limitation is prescribed by this Act, either— (a) the action is based upon the fraud of the defendant; or (b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or (c) the action is for relief from the consequences of a mistake; the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it. References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent. (2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.” (a) the action is based upon the fraud of the defendant; or (b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or (c) the action is for relief from the consequences of a mistake; the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it. References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent. (2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.”

“We don't have much experiencing reviewing within NUIX. We use the review as an early case assessment .... to verify properly processed data ..... do some preliminary searches to get an idea of volume - to check for encrypted data etc We use NUIX as a processing tool - we import - process – and then export everything so that we can have the flexibility to review in anything we want. It doesn't sound right to me that they have this type of restriction. I can already think of problems here for example what if someone accidentally codes a document as non-responsive and needs to go back and correct the error? There would potentially be missed data .... this would not fly with the SFO. And let's remember that in cases like this the SFO are using the tool to search and find and review documents related to an investigation. They don't need to go through and flag documents as being responsive or not - they have the pleasure of assuming all documents are responsive - because that's why the received them. NUIX is a pretty impressive piece of software, The software can be tailored to do pretty much anything you want, So I would be surprised if there is a limitation on the software that prevents this sort of thing. I will note that it can be difficult tailoring the software to do different things other than the default setup. We've certainly had our issues with tailoring the software - but at least we are allowed to do it! I can't say with absolute authority that what the vendor is saying is incorrect. But I've sent an email to NUIX support to see if they can shed light on this.”

“declarations that (i) the SFO is not entitled to publish, disclose, divulge or otherwise make use of any confidential and privileged material which was disclosed to the SFO by Dechert and/or Mr Gerrard in breach of duty, including but not limited to the June 2013 Material and (ii) that members of the SFO’s staff who reviewed the said material should be removed from the team investigating ENRC.”

“There remains, however, the final question whether the law or equity as to breach of confidence operates, in the terms of paragraph 14 of the special case, to give the plaintiff " any equity to prevent the defendants from tendering a copy of the letter in evidence in any of the said criminal proceedings," where if tendered it would, as I see it, clearly be admissible: see Calcraft v. Guest…, subject of course to the overriding discretion of the trial court to reject it if it thought its use unfair… …I can dispose briefly of the argument advanced by counsel for the defendants that the plaintiff cannot be entitled to any relief in equity because he does not come with clean hands. That seems to me to beg the question. If the letter was part of a criminal project then the copy is not protected anyhow. If, however, it was not such a part then the mere fact, if it be so, that it may help the defendants prove their case on the criminal charge does not soil the hands of the plaintiff with respect to his proprietary interests in the copy. …As far as I am aware, there is no case directly in point on the question whether that is merely an immaterial difference of fact or a valid distinction, but in my judgment it is the latter because in such a case there are two conflicting principles, the private right of the individual and the interest of the state to apprehend and prosecute criminals: see per Lord Denning M.R. in Chic Fashions …and in Ghani v. Jones… In my judgment it would not be a right or permissible exercise of the equitable jurisdiction in confidence to make a declaration at the suit of the accused in a public prosecution in effect restraining the Crown from adducing admissible evidence relevant to the crime with which he is charged. It is not necessary for me to decide whether the same result would obtain in the case of a private prosecution, and I expressly leave that point open.”