LONDON: International mining group BSG Resources is taking former PR agency FTI Consulting and FTI European chairman Mark Malloch-Brown to the UK High Court.
The firm, together with its founder, Israeli diamond mining magnate Beny Steinmetz, said Thursday that it has issued and served legal proceedings against FTI and Malloch-Brown.
The legal action centers on claims that Malloch-Brown's relationship with international financier George Soros, a strong critic of BSGR, meant FTI was not working in the best interests of its client.
BSGR alleges that FTI is guilty of breach of contract, while 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 2012 over what was said to be “conflict issues.”
The split came as BSGR was embroiled in a $10 billion international dispute over mining rights in Guinea after the newly elected government of the country pledged to take back the company's mining licenses after making allegations of corruption against BSGR.
PRWeek UK subsequently broke the news that agency Powerscourt had been brought in by Onyx Financial Advisors to help BSGR.
BSGR said that its claim “sets out in detail that FTI and Malloch-Brown acted unlawfully, acted against the best interests of BSGR, and, in the case of 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 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 Soros and providing confidential information to Soros.”
“This culminated in Malloch-Brown, under pressure from Soros, procuring FTI's resignation from its account with BSGR in November 2012,” BSGR said in a statement. “The claimants consider 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.”
Malloch-Brown was UN Deputy Secretary-General under Kofi Annan in 2006 and joined former Prime Minister 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, 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,” Cramer continued.
FTI did not comment by the time of publication, but it is understood that the agency plans to vigorously contest the claims.
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.
This story originally appeared on the website of PRWeek UK, the sister publication of PRWeek at Haymarket Media.