Glencore sets aside £1bn to settle corruption and bribery probes

Glencore has set aside £1.1billion to set­tle cor­rup­tion and bribery inves­ti­ga­tions as it clocked up record profits.

The min­ing and com­modi­ties trad­ing titan said it is like­ly to resolve probes in the UK, US and Brazil this year – and expects heavy fines.

Chief exec­u­tive Gary Nagle is keen to draw a line under the cas­es as he tries to clean up its rep­u­ta­tion and fend off an attack from activist investor Bluebell Capital Partners. ‘We are chang­ing the cul­ture,’ he said.

Digging itself out of trou­ble: Glencore said it is like­ly to resolve cor­rup­tion and bribery inves­ti­ga­tions in the UK, US and Brazil this year – and expects heavy fines

The FTSE 100 group made around £16billion in prof­its, up from £8.6billion the pre­vi­ous year, and said it would hand £3billion to investors through share buy­backs and dividends. 

The Swiss firm also announced more mon­ey for the UK elec­tric car bat­tery firm Britishvolt, which is build­ing a fac­to­ry in Northumberland.

Already an investor, Glencore has ploughed anoth­er £40million into the lat­est fund­ing round, which raised £200million.

Glencore shares rose 1.2 per cent, or 4.9p, to 427p – the high­est it has trad­ed at since 2012. 

Its stock has risen by more than a third since Nagle took over last year from Ivan Glasenberg, who took Glencore pub­lic in 2011.

Nagle said he was ‘not hap­py’ with set­ting aside £1.1billion, even though it was a frac­tion of turnover. He said: ‘We recog­nised there has been mis­con­duct in this com­pa­ny historically.

We have worked very hard to cor­rect that. We are chang­ing the cul­ture. We want to com­plete these inves­ti­ga­tions, put a line under that and move forward.’

The US Department of Justice began an inves­ti­ga­tion in 2018 into sus­pect­ed cor­rup­tion in Nigeria, the Democratic Republic of the Congo and Venezuela.

Russian oil giant jettisoned 

Glencore has sold out of Russneft, one of Russia’s biggest oil com­pa­nies, after 20 years of involvement.

The Footsie com­modi­ties giant helped build the Russian firm from scratch – fund­ing expan­sion in return for oil ex-port rights. This allowed it to trade mil­lions of bar­rels of oil.

Russneft was found­ed in 2002 by bil­lion­aire Mikhail Gutseriyev, who was sanc­tioned by the EU last year for his close ties with Belarusian leader Alexander Lukashenko.

Nagle kicked off the sale in December, and said: ‘If there is some sort of activ­i­ty in Ukraine and Russia, it will cause severe dis­rup­tions in var­i­ous com­mod­i­ty markets.’

He said Glencore does not have major con­cerns about oth­er Russian investments. 

In the UK, the Serious Fraud Office launched its probe in 2019, while cas­es were also brought by pros­e­cu­tors in Brazil, Switzerland and the Netherlands – as well as anoth­er US case from the country’s com­modi­ties reg­u­la­tor into mar­ket manipulation.

Some of the cas­es have ques­tioned Glencore’s links with Israeli bil­lion­aire Dan Gertler, who had close ties with for­mer Congolese leader Joseph Kabila and was said to be the unof­fi­cial gate­keep­er of nat­ur­al resources deals there. Glencore employs around 135,000 peo­ple world­wide at around 150 sites.

It already mines bat­tery met­als includ­ing cop­per, nick­el and cobalt – but it wants to refo­cus on ‘com­modi­ties of the future’ to hit net zero tar­gets worldwide.

Nagle and his team are review­ing 27 assets, 14 of which are being sold.

Activist share­hold­er Bluebell Capital has said Glencore’s plan to keep ther­mal coal in its port­fo­lio until 2050 was ‘moral­ly unac­cept­able and finan­cial­ly flawed’.

Glencore’s strat­e­gy is to run down its coal busi­ness over three decades and this has been backed by its biggest shareholders.

On Monday, Bluebell sug­gest­ed it spin off its coal arm into a sep­a­rate com­pa­ny – though Nagle reject­ed the calls.

SP Angel ana­lysts said: ‘Glencore is well placed to con­tin­ue to ben­e­fit from strong demand for indus­tri­al met­als and trad­ing in raw materials.

High prices for oil, nick­el, cop­per and coal are like­ly to con­tin­ue to dri­ve earn­ings high­er.’

Original source of arti­cle: Daily Mail