Glencore (GLEN) has been hit with a third regulatory probe into its businesses, after the Serious Fraud Office (SFO) announced it is investigating “suspicions of bribery in the conduct of business” by the miner's subsidiaries, "officials, employees, agents and associated persons". The development comes amid two probes in the US, and a finding of misleading accounting at a Canada-listed subsidiary last year. Glencore’s shares fell 7 per cent on the news, to 221p.
In July 2018, Glencore was subpoenaed by the US Department of Justice in relation to its activities in the Democratic Republic of Congo (DRC), Venezuela and Nigeria stretching back more than a decade. Earlier this year, the company confirmed the US Commodity Futures Trading Commission was probing whether Glencore and its subsidiaries had engaged in "corrupt practices in connection with commodities".
In between those disclosures, the Ontario Securities Commission issued a $22m (£17m) fine to Glencore's 75 per cent-owned subsidiary Katanga Mining (CAN:KAT) over the company's lack of disclosure around its dealings with Dan Gertler in the DRC.
The SFO investigation, which the commodities giant said it will co-operate with, also comes two days after Glencore’s capital markets day, when chief executive Ivan Glasenberg told investors to expect more management changes in 2020. Since mid-2018, the company has already seen the departures of several members of what Mr Glasenberg termed the “old guard”, although the chief executive said he would leave once a successor was clear from the new crop of Glencore leaders.
This new group will have to get the all-important African copper division back on track after government interventions and weak base metal prices have chipped away at its profitability.
