Glencore’s (LON:GLEN) copper operations in the Democratic Republic of Congo will soon be the target of British regulators, which are planning to open a formal bribery investigation into the company and its deals with Dan Gertler, an Israeli mining tycoon implicated in the payment of bribes to the country’s leader Joseph Kabila.
An investigation by Britain’s Serious Fraud Office (SFO) “would represent a real breakthrough in the fight to keep London-listed corporations accountable for the business they do overseas,” Peter Jones from advocacy group Global Witness told Bloomberg, which broke the news. “If an investigation is launched, Glencore’s management is going to have to explain the opaque deals it struck with Gertler which cost the Congolese people over half a billion dollars in potential revenues.”
Glencore is also facing legal action from Gecamines, the state miner that is its joint venture partner at Katanga.
Gertler, a close friend of DRC President Joseph Kabila, has denied wrongdoing, and even told the Financial Times last year that his efforts to bring billions of dollars in investment to the DRC deserved a Nobel Prize.
Instead of a trophy, he received sanctions from US regulators, who said the billionaire had used his friendship with Kabila to corruptly build his fortune. His assets included previously owned stakes in Glencore’s two key projects in the resource-rich country, before the miner and commodities trader bought him out for $960 million in 2017.
The mining and oil magnate has also been the target of a previous British bribery probe as well as an investigation by Canada’s OSC regarding more than $100 million in payments Katanga Mining made to a company owned by Gertler, instead of to Congo’s state-run mining company, Gecamines. Glencore later acknowledged the shift in payments, claiming it was done at the request of Gecamines.
Shares in the company dropped about 7% to 370p, their steepest fall in almost two years, following Bloomberg’s report.
The news of an imminent SFO probe is the latest problem the world’s biggest commodity trader is facing in the DRC, where it’s the top producer of copper and cobalt.
Gertler recently took its former partner to court, alleging he is owed about $3 billion in damages and unpaid royalties, which Glencore stopped paying after he was sanctioned by the US in December.
Glencore is challenging the government over a new mining code, which increases taxes and royalties, while state-owned miner Gecamines last month accused the Swiss firm of “draining” their Kamoto joint venture of profit and asked a Congolese judge to dissolve the copper-cobalt partnership.
The SFO said it could neither confirm or deny the Bloomberg report, while Glencore declined to comment.
2 Comments
André Clodong
The Congolese people of all hues are the real victims of this battle of giants. It is regrettable that the former colonist (Belgium) and the EU, among other international bodies, remain passive. More power to the UK!
samarendra dey
Bribery is an age old colonial hangover called compensation chronological history will institute why conquerors use horses to give them speed after rape and plunder so come in the classification of Rich, whilst prophets choose donkey for their sureness commitment and knowing load value that, naturally brings about their stubbornness!
Poverty is a tool for the rich to show handouts as charity as a compromise called compensation. Yet we are preached god is the ultimate owner and judge!
I rest my case to the Institutions who are preachers and condemners of the polarised governance called administration to keep the wall of ruled and rule into the polarised segment the recycled slavery.