Business

Glencore ordered to pay R5.7bn over African bribes

Glencore Plc was hit with a £276 million (R5.7 billion) penalty by a London judge after pleading guilty to coordinating a sprawling effort to bribe government officials for access to oil cargoes across Africa.

The commodities trading giant admitted to seven counts of bribery across five countries including Nigeria and Cameroon, following a long-running Serious Fraud Office investigation. Prosecutors focused in on the firm’s London trading desk, saying Glencore’s traders and executives paid more than $28 million in bribes to secure access to oil cargoes between 2011 and 2016.

The SFO fine represents about half a week’s profit for the booming firm — Glencore made $100 million-a-day in the first six months of the year. In the first-half alone its core profit hit a record $18.9 billion, propelled by record coal prices and its best ever trading performance.

Read: Cash, traders and oil: How Glencore bribed its way across Africa

“The conduct that took place was inexcusable and has no place in Glencore,” Kalidas Madhavpeddi, Glencore’s chair, said in a statement. It’s “committed to operating a company that creates value for all stakeholders by operating transparently under a well-defined set of values, with openness and integrity at the forefront.”

The world’s top coal shipper, has been one of the biggest winners from the global energy crunch as demand surges for fossil fuels. The company’s trading business has also cashed in on dramatic price swings across markets from metals to oil following Russia’s invasion of Ukraine.

Prosecution lawyers laid out on Wednesday the level of corruption that saw cash delivered in private jets to pay the bribes. The fine was handed down by Judge Peter Fraser at Southwark Crown Court on Thursday. The penalty includes a £93 million confiscation order and takes into account a discount for Glencore’s guilty plea.

“Bribery was clearly part of the culture for a number of personnel on the west Africa desk,” Fraser said. “These counts represent sophisticated offending that was sustained over prolonged periods of time that are measured in years.”

Glencore initially set aside $410 million for the UK fine in the 2021 accounts of its British subsidiary. In May, Glencore said it expected to pay around $1.5 billion in total to resolve three investigations.

© 2022 Bloomberg


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