Global Witness expressed alarm at reports that FTSE-100 listed miner ENRC may be close to a deal to buy out Congolese mining assets belonging to businessman Dan Gertler.
Companies associated with Mr Gertler have been the subject of a Global Witness investigation into possible corruption.
The Sunday Times reported on 22 July that a buyout would be "part of a corporate clean-up" led by ENRC's chairman Mehmet Dalman, aimed at ending a controversy that was sparked in 2010.
In 2009, the Congolese authorities confiscated the Kolwezi copper mining project from First Quantum, one of ENRC's competitors. After confiscating the Kolwezi project, the Congolese authorities sold 70 per cent of it on to offshore companies associated with Mr Gertler, a friend of the Democratic Republic of Congo's President, Joseph Kabila. ENRC went on to purchase a 50.5 per cent stake in these offshore companies in August 2010. In January 2012 ENRC agreed to pay $1.25 billion to rival First Quantum, under an agreement to settle court action by First Quantum and to allow ENRC to take over assets and companies in Congo that had belonged to First Quantum.
In spite of the January 2012 settlement, numerous corruption risks remain. There are, notably, questions as to who the true beneficiaries of Mr Gertler's offshore companies are, and whether they could count amongst them corrupt Congolese officials. Global Witness's concerns regarding Mr Gertler's dealings with ENRC over Kolwezi and other mines are detailed in a memorandum to shareholders of 12 June 2012, available on the Global Witness website. In the memorandum and other publications, Global Witness has expressed concern over the low prices paid by Mr Gertler's companies for many of Congo's most valuable copper and cobalt mines. Global Witness has also questioned the secretive nature of the deals, which took place without any public tenders.
Global Witness has also published responses from Mr Gertler's representatives, who, along with ENRC, strongly deny that any corruption has taken place. Mr Gertler's representatives say that all his offshore companies have solely members of the Gertler family as beneficiaries.
Global Witness believes that any buyout of Mr Gertler's companies by ENRC would pose new corruption risks, given ongoing concerns surrounding the beneficiaries of these the companies.
Global Witness has been calling for ENRC to publish the full results of an external audit into its dealings in Congo, conducted by the law firm Dechert. It is unclear whether that audit has yet been completed. If ENRC buys out Mr Gertler's companies without such an audit being published, the company would effectively be sweeping the issue of possible corruption - an issue of national concern to Congo - under the carpet. It would also risk paying large sums of cash to offshore companies that, in the opinion of Global Witness, still represent a substantial corruption risk.
ENRC should suspend any proposed dealings with Mr Gertler's companies until all corruption concerns have been allayed.