Glencore plunges after US subpoena regarding money laundering
LONDON – Glencore tumbled the most in two years as its African troubles escalated dramatically after US authorities demanded documents relating to possible corruption and money laundering.
The world’s biggest commodity trader said Tuesday that it’s been subpoenaed by the US Department of Justice to produce documents with respect to compliance with the Foreign Corrupt Practices Act and United States money laundering statutes. The documents relate to the company’s business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to the present. The shares plunged as much as 11%.
It’s been a tumultuous year for Glencore, mostly due to challenges linked to its business in the Congo, where it operates giant copper and cobalt mines. The Swiss company trader and miner is already facing the possibility of a bribery investigation by UK prosecutors over its work with Dan Gertler, an Israeli billionaire and close friend of Congo President Joseph Kabila, people familiar with the situation said in May.
Glencore said it is reviewing the subpoena and will provide further information in due course as appropriate.
The shares dropped to the lowest since July 2017 and were down 10% by 9:06 a.m. in London.
“Given the flow of negative news we’ve had through the course of this year, the knee jerk reaction is worse than it otherwise might have been,” Hunter Hillcoat, an analyst at Investec Securities, said by phone. “The DOJ fines can be big, but to wipe out 10% of the market cap would be bigger than any fine I can recall.”
Last month, the company’s problems seemed to be easing as it headed off two of its biggest challenges in the DRC. Faced with the risk of losing control of its mines, Glencore bowed to the demands from two entities with close government ties -- the state-run mining company Gecamines and Gertler, who’s currently under US sanctions.
Glencore’s bonds also slumped on the news. The company’s €500-million ($583-million) of notes due April 2026 led the decline, falling 3 cents on the euro to 108 cents, the biggest drop in more than two years, according to data compiled by Bloomberg.
Comments
The
functionality
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation