Glencore Reaches Settlements With U.S., U.K., Brazil on Bribery, Market Manipulation

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Anglo-Swiss company says two business units are to blame

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Glencore plc said on Tuesday it would plead guilty to bribery in Britain and was ready to settle a long-running US corruption investigation, calling a criminal investigation into the company’s global mining and trading business, according to people familiar with the matter. Resolving, which has hung the company. years.

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Britain’s Serious Fraud Office has charged a company unit with seven counts of bribery in connection with a $24 million payment for preferential access to oil in Africa.

The people said that as part of the settlement of the US investigation, Glencore, or a subsidiary of the company, would plead guilty to violating the Foreign Corrupt Practices Act.

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In often risky developing countries where trading superpowers such as Glencore go to obtain and ferry minerals and other resources around the world, guilty pleas and fines depend on commercial conduct over many years.

The company declined to comment further on SFO’s allegations, having previously said it would appear in court in the UK and US on Tuesday.

The Anglo-Swiss company has revealed that it has set aside $1.5 billion to cover the cost of settlements in the US, UK and Brazil. Glencore has told shareholders that it faces criminal and civil investigations from the Justice Department, the US Commodity Futures Trading Commission, the UK SFO and the Brazilian Federal Prosecutor’s Office.

The investigation’s settlement removes a distraction for Glencore as it seeks to position itself best among big miners to capitalize on the global push to decarbonize transportation and energy. Although still a major player in coal, miners have a large business in metals such as cobalt, copper and nickel, which are considered important for electric-vehicle batteries and the transmission of electricity.

The SFO said it had uncovered bribery and corruption in Glencore’s oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan. There, Glencore’s agents and employees paid bribes for preferential access to crude with the company’s approval, the SFO said in a statement.

The SFO said a London court would sentence Glencore on June 21.

In addition to allegations of bribery, Glencore has also faced investigations into US market manipulation. A former Glencore oil trader pleaded guilty last year to conspiracy to manipulate fuel-oil benchmarks.

Another former Glencore businessman last July, in violation of the US Foreign Corrupt Practices Act, for plotting money laundering and paying officials millions of dollars in exchange for favorable contracts with a state-owned oil company in Nigeria and elsewhere. Convicted.

UK citizen Anthony Stimler, according to court records, was involved in funneling hundreds of thousands of dollars to middlemen from 2013 to 2015 to facilitate Glencore’s access to Nigerian oil. Officials alleged that Mr Stimler worked with co-conspirators, including other former Glencore businessmen.

Several executives, including the former CEO of Glencore, who were in their roles during the period investigated by the authorities, have already left the company.

Former Chief Executive Officer Evan Glassenberg declined to comment.

The investigation decimated Glencore’s share price for several years and increased legal costs for the company. For example, legal costs reached $56 million for the first half of 2020.

Glencore is still under investigation by Brazilian, Swiss and Dutch authorities.

Glencore’s share price rose 1.25% in London on Tuesday.

In the past year, the company’s stock price has soared 70% amid a massive rally in the price of commodities such as coal, cobalt and nickel, and gains for its larger trading division as market volatility looms large.

New chief executive Gary Nagle has sought to streamline the giant company by selling off smaller assets.

The settlements are “good news for Glencore, but there are still overhangs on the stock,” said Ben Davis, an analyst at Librem. These include the company gradually closing its coal division, which is currently extremely profitable, Mr. Davis said.

Write Dave Michaels at [email protected] and Alistair McDonald at [email protected]

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