LONDON, April 25 Britain's Serious Fraud Office
has begun a formal investigation into allegations of fraud,
bribery and corruption at Kazakh miner ENRC, following
months of talks between the two sides and two internal
The formal probe, announced by London-listed ENRC and
confirmed by the SFO, comes as the company faces a potential
buyout bid from its three co-founders and the Kazakh government.
ENRC said it was cooperating with the SFO.
"ENRC is committed to a full and transparent investigation
of its procedures and conduct," the company said on Thursday.
Last year ENRC said it had begun investigating allegations
of illegal payments in Kazakhstan, and the results of that probe
have already been filed to the SFO. A second investigation into
the group's African operations was ongoing.
ENRC, a miner with operations in Kazakhstan, Africa and
Brazil, has for months been struggling to move on from issues
that have dragged on its shares. These include the corruption
investigations but also damaging battles between directors and
its trio of founding shareholders, and $5 billion of debt.
This week, the chairman brought in to lead a turnaround,
Mehmet Dalman, resigned.
Earlier on Thursday, Moody's downgraded ENRC's corporate
family rating, placing it on review for further downgrade due to
"new degrees of uncertainty and unpredictability over the future
direction of the company".
The group's trio of founders and the Kazakh government
announced last Friday that they were considering a potential bid
for the shares in ENRC they do not already own. They have until
May 17 to confirm an intention to make an offer.
The trio and the Kazakh government own a 55 percent stake.
Rival Kazakhmys, however, is ENRC's largest single
shareholder with a 26 percent share.