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

Glencore PLC on Tuesday said it would pay at least $1.2 billion and two business units would plead guilty to bribery in the UK and conspiracy to breach US anti-corruption laws, settle investigations Crime into the global mining and trading business has dogged the company for many years. .

Glencore GLNCY 1.70%

PLC said on Tuesday it would plead guilty to bribery in the UK and prepare to tackle lengthy US corruption investigations that, according to people familiar with the matter, deal with criminal investigations. to the global mining and business that have dogged the company for many years. .

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

People said as part of the settlement of US investigations, Glencore, or a subsidiary of the company, will plead guilty to violating the Foreign Corrupt Practices Act.

Confessions and fines can take into account years of commercial practice in often risky developing countries, where business powerhouses such as Glencore go to obtain and transport minerals and other resources. all over the world.

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

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

The settlement of the investigations removed a distraction for Glencore as it sought to present itself as the best-positioned among the major miners to capitalize on the push to globalization of transport and energy. While still a major player in the coal sector, the miner has large businesses in metals such as cobalt, copper and nickel that are considered important for electric vehicle batteries and power transmission.

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

A London court will sentence Glencore on June 21, the SFO said.

In addition to the bribery allegations, Glencore also faces a US market manipulation investigation. Last year, a former Glencore oil trader pleaded guilty to conspiring to manipulate fuel oil prices.

Last July, another former Glencore trader pleaded guilty to conspiracy to launder money and pay millions of dollars in bribes to officials in Nigeria and elsewhere in exchange for favorable contracts with an oil company. state gas, in violation of the United States Foreign Corrupt Practices Act.

Anthony Stimler, a UK citizen, was involved between 2013 and 2015 in spending hundreds of thousands of dollars on middlemen to give Glencore smooth access to Nigerian oil, according to court filings. . Authorities allege that Mr Stimler worked with accomplices, including other former Glencore traders.

Several executives, including former Glencore executives, who filled their roles during the government review, have left the company.

Former CEO Ivan Glasenberg declined to comment.

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

Glencore remains under investigation by Brazilian, Swiss and Dutch authorities.

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

Over the last year, the company’s stock price has jumped 70% amid the price of commodities it digs up, such as coal, cobalt and nickel, and as market volatility turns profits for the business division. big business of the company.

New CEO Gary Nagle sought to simplify the already strong company, selling off smaller assets.

Ben Davis, an analyst at Liberum, said: “Good news for Glencore, but inventory remains. These include the company is gradually downsizing its coal division, which is currently extremely profitable, Davis said.

Write letter for Dave Michaels at dave.michaels@wsj.com and Alistair MacDonald at alistair.macdonald@wsj.com

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https://www.wsj.com/articles/glencore-set-to-settle-corruption-charges-in-u-s-11653402827?mod=rss_markets_main Glencore Reaches Settlements With U.S., U.K., Brazil on Bribery, Market Manipulation

Edmund DeMarche

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