Glencore under investigation for bribery by United Kingdom authorities

Darnell Taylor
December 8, 2019

Global mining giant Glencore is under investigation from the UK Serious Fraud Office.

Glencore Plc is being investigated for bribery by United Kingdom authorities, deepening the legal woes that threaten the world's biggest commodities trader.

The Serious Fraud Office (SFO) revealed yesterday that it was looking at the "conduct of business by the Glencore group of companies, its officials, employees, agents and associated persons" as part of its investigation.

Boies Schiller Flexner said the suit is "expected to run into the billions", after Glencore disclosed on Thursday (Dec 5) that the UK's Serious Fraud Office was investigating it, sending its shares plunging.

Glencore Australia operates multiple coal mines in the Bowen Basin including mines in Clermont, Collinsville, Glenden, Emerald and Middlemount.

Glencore, which was subpoenaed in July 2018 by the U.S. Department of Justice over possible violations of the Foreign Corrupt Practices Act relating to operations in Nigeria, Venezuela and the Democratic Republic of Congo (DRC), said it would cooperate with the investigation.

"This is an obvious negative for the Glencore investment case", said Tyler Broda, an analyst at RBC Capital Markets.

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More investigations will also add pressure on Glencore's billionaire Chief Executive Officer Ivan Glasenberg. Once a new layer of management was in place, he would be in a position to step aside, he said.

Over the course of this year, Glencore's shares have fallen more than 20 per cent, pressured by broader concerns about safety and sustainability in the Democratic Republic of Congo.

The SFO has not revealed the basis for its inquiry.

But investigators were said to be examining the firm's activities previous year with Israeli billionaire Dan Gertler and former DRC president Joseph Kabila.

"Gertler was sanctioned by the United States in December 2017 for alleged "... opaque and corrupt mining and oil deals" in DRC.

Gertler and Glencore first invested together in a Congolese mine in 2007 and developed a close partnership over the years in the Mutanda and Katanga Mining copper and cobalt operations.

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