Glencore faces legal action over bribery, corruption and fraud: Almost 200 funds seek damages for major losses

Embattled mining company Glencore is facing a multi-billion-pound legal claim by major investors, accusing the firm of lying to cover up corrupt activities when it listed on the London Stock Exchange.

Shares in the FTSE 100 company dipped following the revelation that almost 200 funds, controlled by some of the world’s largest asset managers, are seeking damages against the FTSE 100 firm.

Investment giants including Fidelity, Vanguard and Legal & General are among the claimants.

According to the Financial Times, documents have been filed in London’s High Court alleging investors ‘suffered losses’ due to ‘untrue statements’ in Glencore’s prospectus for its 2011 initial public offering, and in the prospectus for its 2013 merger with Xstrata.

Shares in Glencore dipped following the revelation that almost 200 funds, controlled by some of the world’s largest asset managers, are seeking damages following a cover-up scandal

Pension funds including Scottish Widows, Ontario Pension Board, BP and Shell have also joined the latest legal action as well as sovereign wealth funds such as GIC, Norges Bank, Mubadala, Kuwait Investment Authority and Oman Investment Authority.

The investor claims were filed in the High Court between October 2022 and spring 2023.

In June they filed a joint document outlining allegations covering six related legal cases.

According to the allegations, firms in the Glencore Group committed ‘widespread bribery, corruption and fraud’, some of which senior managers were aware of. 

The claimants say they purchased shares in Glencore either at the time of its London listing or the merger but that the prospectuses contained ‘numerous untrue and misleading statements’, due to ‘Glencore’s failure to disclose that bribery, corruption and fraud were prevalent in the business activities of key operating subsidiaries’, according to the FT.

The 200-page claim focuses on three allegations, including alleged bribery connected to copper and cobalt acquisitions in the Democratic Republic of Congo and Glencore’s oil trading business in West Africa, South Sudan, Brazil and Venezuela as well as alleged fuel oil price manipulation in the US. Glencore declined to comment.

In previous statements the company has made in relation to allegations of bribery, Glencore said the conduct was ‘inexcusable and has no place in Glencore’.

It has not filed its defence and there is no clear timeline for the case to go to court.

The London-listed company, which has its headquarters in Switzerland, was ordered to pay £281million following an investigation by the UK’s Serious Fraud Office last year. 

It found Glencore had paid £23million in bribes to gain preferential access to oil in Africa.

The company pleaded guilty in the landmark case in June 2022 to five counts of bribery and two of failure to prevent bribery after the probe found it paid bribes to access oil in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan.

This post first appeared on Dailymail.co.uk