London court forces Glencore to pay record £281m for corruption in Africa | glencore

Mining and commodities giant Glencore will be forced to pay £281million in fines, forfeited profits and costs as punishment for ‘sustained criminality’, the heaviest sentence ever imposed on a company by a court British.

A judge at Southwark Crown Court in London on Thursday said the offenses committed by a UK subsidiary of Glencore showed strong culpability for the “highly corrosive” offence.

Glencore received a one-third reduction on the fine for pleading guilty to the bribery charges, which were brought by the UK’s Serious Fraud Office (SFO).

The court heard how Glencore employees and agents gave bungs worth $27 million to unnamed officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan, causing damages worth $128m to £81m at the time of the breaches.

Glencore employees sent bribes of cash to Africa in private jets and used “fictitious” documents to hide the real purposes of the money, the SFO said. Senior Glencore employees signed the cash withdrawals used for the payments.

The company’s chairman, Kalidas Madhavpeddi, attended the hearing in person on the second day, wearing a face mask in court.

Judge Fraser said corruption was “endemic” at the African oil trading desk of Glencore Energy UK Ltd, which is 100% owned by FTSE 100 company Glencore.

The SFO has requested the anonymity of employees who allegedly committed the bribery while it considers whether to bring charges against individuals. The judge said he made no findings about the individuals.

It was a landmark case for the SFO, as it was the first ever charged with bribing another person. Glencore also pleaded guilty to two counts of the related offense of failing to prevent corruption.

However, the penalties he will pay in the UK are still far lower than those imposed by US authorities, despite the fact that Glencore is listed in London and much of the corruption involves its West Africa office. based in the British capital.

Glencore has already set aside $1.5 billion to cover costs related to the corruption charges. The company agreed in May to pay US authorities $1.1 billion for violating bribery laws and manipulating commodity prices, and had previously said it did not anticipate any additional costs.

Beyond the financial sanction and any other damage to reputation, the consequences for Glencore could be limited.

Iskander Fernandez, a partner at Kennedys law firm, said the main concern would be that a bribery conviction would prevent companies from bidding on some government contracts.

Shareholders including Abu Dhabi’s Mubadala and the Kuwait Investment Authority have also reportedly sued the company for damages to the value of its investments in the company.

“Except for the above, nothing else would prevent a company from moving forward and continuing to operate – albeit under the watchful eye of the public and/or regulators – following of a bribery conviction,” Fernandez said.

The SFO lawyer argued on Wednesday that ‘corruption was rampant’ within Glencore, but the company’s lawyer said it had totally changed its culture since corruption was first detected by US authorities in 2017.

The SFO was hoping for penalties of up to 3.5 times the value of the damage caused by the corruption. Glencore had recognized the evil.

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