Mining

Switzerland’s office of attorney-general opens criminal investigation of Glencore

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GLENCORE’S probity will fall under the glare of authorities in its home country after Switzerland’s Office of the Attorney-General (OAG) launched a criminal investigation into the mining and commodities trading company.

The Swiss-headquartered company said in an announcement after trade had closed on Friday that the investigation will study the failure to have organisational measures in place to prevent alleged corruption in the Democratic Republic of Congo (DRC).

Glencore said it would cooperate with the OAG’s investigation.

The company is facing multiple inquiries into its business activities. In December,  the UK’s Serious Fraud Office (SFO) had opened an inquiry into “suspicions of bribery”.

This investigation came a year after the Department of Justice (DoJ) in the US subpoenaed Glencore for documents relating to trading activities in places such as the DRC. In addition to investigations by the DoJ and SFO, the US Commodity Futures Trading Commission put Glencore under the microscope in April for possible corrupt practices.

Past fines imposed by the SFO – whilst hardly a nailed-on indicator of how any sanction would turn out for Glencore if found guilty of malfeasance – have included $650m on Rolls Royce after initially being slapped with an $870m fine. Other companies that have fallen foul of the SFO are Tesco and Standard Chartered.

The risk of a serious fine was weighed on the company’s share price.

The investigations come at a delicate time for Glencore which is currently introducing a new generation of managers into the business.

“There are not many of the old guys left,” said Glencore CEO, Ivan Glasenberg, when in an investor update in December he addressed the group’s succession plans. “When new management is in place, which will be as early as possible … I will move aside.” He added, however, that one of the crop of new managers would “have to be ready” first.

“It could be quite soon,” he said, possibly referring to a decision on his own future during the course of 2020. Glasenberg has been CEO of Glencore for about 18 years. He turned 63 years old in January.

Source: miningmx.com

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