Lawsuit in New York: ex-Glencore trader admits bribery in Nigeria
The Zug-based commodity company has taken note of the verdict from the USA. At the same time, Glencore is settling a US antitrust lawsuit with a payment of millions.
A former trader working for Glencore, the commodity giant, pleaded guilty before a New York court on Monday. In the view of the public prosecutor’s office (district attorney), the trader was involved in a conspiracy to bribe officials of Nigeria's state-owned oil company. During one hearing, the man admitted that he had violated US Federal legislation on combating corruption and had engaged in money-laundering. By making this admission, the former employee reached an agreement in a criminal case with the US Department of Justice. In return, he can hope for mitigation of his sentence. On Monday evening, the commodities company stated that it was taking note of the agreement between the former employee of the Glencore oil business and the authorities. The conduct described, it said, was “unacceptable” and had no place at Glencore. Cooperated with the authorities
The company, it was said, had cooperated fully with investigations undertaken by the US Department of Justice and the other US authorities, and would continue to do so. Furthermore, it was added, a whole series of measures had been implemented against cases of this sort, and the company undertook to act ethically and responsibly in all aspects of the business. Also, Glencore had substantially improved its ethics and compliance programme in recent years. According to information from the Bloomberg and Reuters news agencies, the guilty ex-employee of Glencore was working for Glencore in the United Kingdom until 2019. He now remains free on bail of USD 500,000, it was said. According to the public prosecutor’s office, bribes went to officials in Nigeria and elsewhere. In return, the “Nigerian National Petroleum Corporation” was said to have awarded oil contracts and supplied more lucrative oil grades at more favourable delivery conditions. The court documents refer to seven alleged co-conspirators from several countries who are believed to have been involved in the bribery attempts from 2007 to 2018. However, none of them has been charged or named.
Zinc traders file suit against Glencore As was also disclosed late on Monday evening, Glencore is seeking to settle a private US antitrust lawsuit with a payment of USD 9.85 million. Zinc traders accused two divisions of the Anglo-Swiss mining company of monopolising the market for zinc and driving its price up. According to Reuters, the provisional settlement was filed with Manhattan District Court on Friday evening. This would bring an end to a lawsuit that began in May 2014. The competent district judge still has to approve the agreement. The specific charge is conspiracy, which can be a federal offence in the USA. Between September 2010 and February 2016, two companies – Glencore Ltd. and Pacorini Metals USA Inc. – are said to have taken deliberate steps to ensure that purchasers of zinc would have to wait for long periods in front of warehouses in London before obtaining their goods. In this way, the company is said to have received higher storage fees, enabling it to demand higher premiums on sales of zinc. It is striking that the warehouses were licensed by the London Metal Exchange. Zinc is used to protect steel against corrosion by applying special coatings. However, it is also used in batteries, castings and alloys such as brass. When asked, Glencore denied “any wrongdoing". On Tuesday morning, a spokeswoman said that the settlement had been concluded only in order “to avoid the costs, risks and expense of a lawsuit.”
Change at top of Glencore Board of Directors
A change of Chairman is taking place on the Board of Directors of Glencore (GLEN 319.80 +1.44%), the commodities trading and mining group. The current Board of Directors Chairman Tony Hayward is stepping down at the end of July. He will be succeeded by Kalidas Madhavpeddi. Hayward was appointed to the Glencore Board of Directors at the time of the company’s IPO in 2011, and he was elected Chairman in 2013. After consultations with the company’s largest institutional shareholders, it was agreed that he will now step down after the second extension of his term of office, according to an announcement from Glencore on Monday. His successor Kalidas Madhavpeddi has been a member of Glencore’s Board of Directors since last year. He has 40 years’ experience in the international mining industry, it was stated, and among the positions he has held is that of Chief Executive Officer of China Molybdenum International, the largest Chinese molybdenum mining corporation, between 2008 and 2019.