Arrest warrant issued for Eurasian Resources Group CEO in SFO investigation

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In the wake of the decade’s most important case concerning legal privilege, an arrest warrant has been issued against the CEO of the Eurasian Natural Resource Corporation (ENRC)’s parent company as part of the Serious Fraud Office’s ongoing investigation into a string of allegations.

The warrant was issued against Eurasian Resources Group (ERG) CEO Benedikt Sobotka for his failure to comply with an SFO notice to appear for questioning without a “reasonable excuse”.

The SFO described the need for an arrest warrant as “rare but necessary step” as it seeks continued clarity in its investigation with the natural resources company.

A statement from the SFO said: “A warrant for the arrest of Benedikt Sobotka has been issued over his failure to appear for questioning in an ongoing corruption investigation into Eurasian Natural Resources Corporation and related companies.

“Mr Sobotka, 37, is the CEO of Luxembourg-based Eurasian Resources Group S.à.r.l. He failed to appear for questioning in London on 26 June this year. Mr Sobotka is wanted by the SFO for prosecution of an offence of failing to comply with a direction, contrary to Section 2(2) and (13) of the Criminal Justice Act 1987.”

US firm Morrison Foerster is named as Sobtoka’s legal adviser with litigation and white collar partner Kevin Roberts his principal lawyer. In a statement, Roberts expressed his “surprise” at the decision to issue the warrant against his client.

Roberts said: “It is neither justified nor necessary, as Mr Sobotka has always been ready to assist the SFO’s investigation into ENRC, to the extent that he can. Mr Sobotka was never an employee of ENRC. He was appointed as CEO of ERG, a different corporate entity not under investigation, three years after the period being investigated by the SFO.  Mr Sobotka nevertheless agreed to attend an interview voluntarily as requested by the SFO, in his capacity as a witness.

“Regrettably, the prosecutor has continuously and inexplicably refused to clarify whether Mr Sobotka would appear in his personal capacity or as a corporate representative of ERG, in which case – as the SFO knows – he would require approval from ERG’s board, as per his professional and fiduciary obligations.

“The SFO’s actions have trapped Mr Sobotka into potentially breaching his obligations to his employer, which is unacceptable. They appear to be part of an unprecedented and extraordinary attempt to intimidate a CEO of a multinational group, after his raising of legitimate questions in relation to the steps taken by the SFO.”

The SFO opened its investigation into the ENRC in April 2013, the same year that the company was de-listed from the London Stock Exchange. The de-listing resulted in the ENRC’s operations transferring to the ERG.

Relations between the SFO and ENRC have grown increasingly strained in the run-up to the Court of Appeal hearing last week which is one of The Lawyer’s Top 20 Cases of 2018.

The ENRC filed a separate claim, lambasting its former adviser Dechert and alleging that the firm had an “unhealthy relationship” with the SFO.

In documents seen by The LawyerHogan Lovells – the ENRC’s law firm – wrote to the SFO expressing “serious concerns” about that relationship, even naming former SFO director David Green QC in the correspondence.

Dechert retaliated in its defence documents, describing the ENRC’s claims over alleged document leaks and the £16m charged by the firm for its advice as “vague and embarrassing“.

The post Arrest warrant issued for Eurasian Resources Group CEO in SFO investigation appeared first on The Lawyer | Legal insight, benchmarking data and jobs.



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