Closed
* Admissibility date reflects the date the case was officially registered. All other dates pertain to the date in which a stage was completed.
Case Description
The case concerns the work performed by the EIB service handling investigation work regarding Spencon, a former East African engineering and construction company focusing on public works and infrastructure projects.
In 2006, the European Investment Bank (EIB) entered into a subscription commitment to invest alongside other investors in the Emerging Capital Partners (ECP) Africa Fund II, a protected cell company, formed and existing under the laws of Mauritius (hereinafter the “Fund”). The Fund was a private equity fund seeking to support private African companies. It was managed by ECP Manager LP, a limited partnership formed and existing under the laws of the US state of Delaware. The EIB made the investment on behalf of the European Development Fund. The Fund made an investment in Spencon in 2006 and 2007. The Fund fully terminated its operations in December 2021.
EIB-CM Action
The EIB-CM analysed the available evidence and the relevant regulatory framework. Based on this, the EIB-CM prepared its conclusions report.
Conclusions
Taking into account the powers conferred on the EIB service handling investigation work, the reviewed evidence leads the EIB-CM to the conclude that:
A. The EIB service handling investigation work did not respond to two emails sent by the complainants enquiring about the status of their case as required.
B. In its communication with the complainants, the EIB service handling investigation work advised that, although they had interviewed a number of former Spencon staff and reviewed a large number of documents, they had not interviewed Spencon’s management representatives or formally exercised rights of access to Spencon documents. The EIB-CM considers that the complainants were not provided with sufficient information to understand the decision of the EIB service handling investigation not to interview Spencon’s management representatives or to formally exercise rights of access to Spencon documents.
C. (i) The EIB service handling investigation work concluded that the available evidence would suggest that Spencon’s management representatives had engaged in illicit activities and possible embezzlement of Spencon funds; (ii) the EIB service handling investigation work concluded that ECP had, more likely than not, been informed of the situation at Spencon; (iii) the EIB service handling investigation work acknowledged that the administrators had reported the questionable activities of Spencon; (iv) the loss related to Spencon had had a small negative impact on the financial performance of the Fund. The EIB service handling investigation work advised the complainants that it did not have sufficient evidence to qualify any of the allegations received as fraud or any other prohibited conduct and as a result proceeded to close the case. The EIB-CM considers that the complainants were not provided with sufficient information to understand the decision of the EIB service handling investigation work to close the case.