The firm, together with its founder, Israeli diamond mining magnate Beny Steinmetz, announced today it has issued and served legal proceedings against FTI and Lord Malloch-Brown.
The legal action centres on claims that Lord Malloch-Brown’s relationship with international financier George Soros, a strong critic of BSGR, meant that FTI was not working in the best interests of its client.
BSGR alleges that FTI Consulting is guilty of breach of contract, while Lord Malloch-Brown is accused of breach of tortious duty of confidence and defamation. Both are also accused of conspiracy to withhold disclosure of a conflict of interest from BSGR.
FTI was appointed by BSGR to act as its PR adviser in May 2009, but split in mid-November last year over what was said to be ‘conflict issues’.
The split came as BSGR was embroiled in a $10bn international dispute over mining rights in Guinea after the newly elected government of the country pledged to take back the company’s mining licences after making allegations of corruption against BSGR.
PRWeek subsequently broke the news that City agency Powerscourt had been brought in by Onyx Financial Advisors to fight BSGR’s corner.
BSGR said that its claim ‘sets out in detail that FTI and Lord Malloch-Brown acted unlawfully, acted against the best interests of BSGR and, in the case of Lord Malloch-Brown, had numerous opposing interests, in particular regarding his relationship with George Soros and his NGOs, some of which were (and are) engaged in a smear campaign against BSGR’.
The claim goes on to allege: ‘When Lord Malloch-Brown’s firm (FTI) was engaged as a key adviser on reputational and other matters, he was behaving in a collusive and unlawful manner with Mr Soros and providing confidential information to Mr Soros.’
‘This culminated in Lord Malloch-Brown, under pressure from Mr Soros, procuring FTI's resignation from its account with BSGR in November 2012,’ BSGR said in a statement.
‘The claimants consider Lord Malloch-Brown’s activities especially shocking, as he was previously a Minister of State in the UK Government and a Deputy Secretary-General of the United Nations.’
Lord Malloch-Brown was UN Deputy Secretary-General under Kofi Annan in 2006 and joined Gordon Brown’s Government in 2007 as Minister of State at the Foreign and Commonwealth Office.
Dag Cramer, CEO of Onyx Financial Advisors UK, said on behalf of BSGR: ‘While purporting to be acting in our best interests, Lord Malloch-Brown was in fact serving to cause us enormous damage by facilitating George Soros and his NGOs which, we believe facilitated a campaign of smears and innuendoes.
‘These actions were unlawful. They severely damaged our position with the Government of Guinea, which is being advised by George Soros and his NGOs and which has been attempting to renege on its contractual obligations in respect of BSGR’s interests in Guinea.’
FTI Consulting responded in a statement that read: 'It is highly unusual for a defendant in a case to receive notification of the `particulars of claim’ from a journalist.
'The fact that BSGR are placing this in the media ahead of service is a demonstration of its lack of merit. Once served on us, we intend to defend this claim vigorously.'
NGO Global Witness, which has received funding from Soros’ Open Society Foundations, has called on BSGR to ‘publicly address questions’ over its mining activities in Guinea.
The article was ammended on 12 April to include FTI Consulting's response