ENRC: Accusations of Corruption and Tax Evasion in Kazakhstan and Africa

In 2013, the U.K.’s Serious Fraud Office investigated ENRC on allegations of fraud, bribery, and corruption in Kazakhstan and Africa. [1] ENRC’s “opaque concession trading” practices in the Democratic Republic of Congo alone have cost the country billions of dollars in potential revenues – funds that could have gone towards rejuvenating underfunded public budgets, such as those for education, the environment, and healthcare. [2][3]

Between 2010 and 2012, the DRC sold a significant amount of their state-owned copper and cobalt assets to offshore companies. In many cases, the offshore companies bought the assets at a fraction of their commercial value then sold them at grossly inflated prices. Several of these suspicious deals involved ENRC.[4]Corruption and a lack of transparency make it very difficult to understand these deals; however, the systematic undervaluation of assets undeniably robs states like the DRC of much-needed revenue.[5] The Africa Progress Panel’s recent report, “Equity in Extractives,” identifies specific cases where ENRC benefited from DRC concession deals.[6]

[1] Serious Fraud Office (2013): ENRC Plc, 25 April; accessed 12.09.2013

[2] Financial Times (2013): Annan report blasts ENRC for costing Congo $725m 09 May, accessed 02.10.2013

[3] Christopher Thompson and William Wallis (2013): “Progress Panel has Congo deals in its sights“, Financial Times, 9 May; accessed 01.10.2013

Szu Ping Chan and Emma Rowley (2013): “Kofi Annan report criticises ‘opaque’ Congo deals by ENRC”, The Telegraph, 10 May; accessed 01.10.2013

[4] Global Witness. (2012): Global Witness Q&A on ENRC in the Democratic Republic of Congo, 12 June; accessed 07.10.2013

[5] Financial Times (2013): Annan report blasts ENRC for costing Congo $725m 09 May, accessed 02.10.2013

[6] Africa Progress Panel (2013): “Equity in Extractives. Stewarding Africa’s natural resources for all”, Africa Progress Report 2013, p. 58; accessed 18.09.2013

Case location
Democratic Republic of the Congo
Congo


Affected topics
  • Corruption
Affected norms and standards Directly and indirectly (through shareholding) involved companies Indirect investors through shareholding

Comments are closed.