Sun, 26 May 2019

Glencore faces new corruption probe by US authority

News24
26 Apr 2019, 05:43 GMT+10

Glencore said it's under investigation by the US Commodity Futures Trading Commission for possible corrupt practices, the latest legal headache for the world's biggest commodity trader.

The probe comes after the London-listed company was subpoenaed last year by the US Justice department for documents relating to its dealings in Nigeria, the Democratic Republic of Congo and Venezuela since 2007.

Glencore said Thursday that the Commodity Futures Trading Commission (CFTC) had notified it of investigations into whether the company and its subsidiaries "may have violated certain provisions of the Commodity Exchange Act and/or CFTC Regulations through corrupt practices in connection with commodities."

The company said it believes the CFTC's investigations "have a similar scope in terms of subject matter" to the justice department probe, which became public last July.

Glencore said to cut workers at Congo copper, cobalt mine

The commodity trading industry is facing a multitude of bribery and corruption investigations in jurisdictions ranging from Brazil to the US, drawing comparisons with the early 1980s when Glencore's founder Marc Rich was prosecuted for tax evasion.

The director of enforcement at the CFTC said last month in a speech that the agency was investigating overseas fraud and manipulation under the Commodities Exchange Act.

"Companies and individuals engaging in foreign corrupt practices should recognise that this sort of misconduct might constitute fraud, manipulation, false reporting, or a number of other types of violations under the CEA, and thus be subject to enforcement actions brought by the CFTC," James McDonald said in New Orleans.

Glencore's shares have declined about 8% since the justice department started is investigation last year, even as most miners gained. Investor sentiment is still negative regarding Glencore, analysts at Jefferies LLC noted last week.

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