Glencore, the majority owners of Mopani Mines has been ordered to hand over documents and records to US regulators related to its operations in Nigeria, the Democratic Republic of Congo and Venezuela dating as far back as 2007, sending its shares tumbling 12 per cent.
The Swiss-based mining and trading group led by billionaire Ivan Glasenberg said on Tuesday that it had received a subpoena from the US Department of Justice to produce documents with respect to compliance with the Foreign Corrupt Practices Act and US money laundering statutes.
The records related to the company’s activities in Nigeria, Venezuela and the DRC.
“Glencore is reviewing the subpoena and will provide further information in due course as appropriate,” the company said.
Glencore is the world’s biggest commodities trader, shifting millions of tonnes of metals, minerals and oil across the globe.
The company prides itself on operating in jurisdictions where many of its rivals fear to tread such as the DRC, Africa’s biggest copper producer and home to significant deposits of cobalt.
Traders noted that the DoJ subpoena comes just weeks after Glencore settled a dispute with Dan Gertler, its former business partner in the DRC.
Glencore said it would pay Mr Gertler in Euros so as to not fall foul of US sanctions, which were placed on the Israeli billionaire last year for his “opaque and corrupt mining deals” in the DRC.
At the time Glencore said it did not believe it was necessary to apply for a licence from the US government to pay Mr Gertler because no US person or the US financial system would be involved in the transactions.
It also claimed it has discussed the royalty payments, which it stopped paying in December, with the appropriate authorities in US and Switzerland, where the company has its headquarters.
However, the move unnerved investors and analysts who said the deal would test Washington’s resolve over sanctioned individuals. On the same day Glencore announced its deal with Mr Gertler, the US Treasury department placed sanctions on 14 companies with ties to the Israeli businessman, including the vehicle that will receive the royalty payments from Glencore.
The DoJ subpoena is the latest in a string of problems to hit Glencore this year.
In addition to its legal fight with Mr Gertler, it also agreed to write off $5.6bn of debt in a joint venture with Gecamines, the DRC’s state mining, to end another legal dispute.
The company could also face a bribery probe by the UK’s Serious Fraud Office over its ties to Mr Gertler.
Global Witness, a campaign group, said: “Holding Glencore accountable is a huge step in global accountability more generally. It would set a precedent for companies all over the world who, in many cases, are able to act with impunity in regards to the world’s mineral wealth.”
In early trading on Tuesday, Glencore shares were down 12 per cent to 303p, wiping more than £5bn off its market capitalisation, which now stands at £45bn.
“There is not enough detail in the release to understand exactly what the investigation holds, however with the subpoena covering multiple countries, this would indicate that there is a relatively thorough investigation at hand,” said Tyler Broda, analyst at RBC Capital Markets.
“The Foreign Corrupt Practices Act appears at first investigation to provide subject to sanctions, fines and penalties up to $25m or twice the gain or loss caused by the violation and imprisonment for up to 5 years per occurrence,” added Mr Broda.
Majority owner of shares in Glencore was a convicted tax cheat in USA when Zambia sold the mines to him in 1999. He was pardoned by Bill Clinton during his last week in office. Now HH had nothing to do with this because the ZCCM Privatization Committee under Francis Kaunda, which Chiluba set up illegally, sold Mufulira and Nkana mines to Glencore. I know that Sharon , Ndanje Khakis, Zambian Citizen and Daily Nation columnists Ngande Mwanajiti and Expendito Chipalo would want to blame HH.
@Chanchima, you are the one who is bringing up HH.
It seems like Mr Gertler has been squealing on Glencore and the 14 other companies sanctioned because of him so he can avoid jail. Glencore headquarters is based in Switzerland so am not surprised about the money laundering accusations.
@1 Chanchima
Thank God for Google everyone now has is a smart ass
USA DOJ operates autonomously; how I wish ours could have fair teeth as theirs. Our so called institutions leave much to be desired. Shame!
The Real Olivia Pope: I have merely pre-emptied them by mentioning HH. The man sold no mine but social assets of ZCCM after the GRZ had asked his then employer Grant Thornton through ZPA. Anonymous: I read about Marc Riche in a book and not Google. It is on my bookshelf in my study as I type this.
You see how serious these Western guys take such issues with these infestors…meanwhile in Zambia, we have not heard a single update on the FQM Vs ZRA billion dollar tax bill
@1.5 Jay Jay the FQM vs ZRA issue all quiet and will soon pass like the FQM vs ZCCM-IH case where $1Bn+ was lost through a well schemed arbitration.
Why are you trying to protect preemptively someone we have not mentioned yet. In fact if our southern aunties and unles knew that HH and Ka Chiluba are the cause of a major economic contributor being flogged for ngwees, they would revolt. We need toi educate our bululus.
Glencore is a deadly Mafia.Switzerland alone makes turnovers in trillions of Dollars with the CR00KS of raw material, oil, gas and name it. The profits go in the pockets of richest JUNK who arrange with Swiss governments, banks and their home officers not to pay any taxes. So the world loses all given stuff of nature and profits to criminal id!0ts, to be tortured to death. Glencore like all other raw material and energy giants here, pays less than 10 percent income tax on profits at ZUG, Switzerland, that are even cheated down by 50 percent by all taxation tricks given on our Globe.
Ok
Glencore is a deadly Mafia.Switzerland alone makes turnovers in trillions of Dollars with the CROOKS of raw material, oil, gas and name it. The profits go in the pockets of richest JUNK who arrange with Swiss governments, banks and their home officers not to pay any taxes. So the world loses all given stuff of nature and profits to criminal idi0ts, to be tortured to death. Glencore like all other raw material and energy giants here, pays less than 10 percent income tax on profits at ZUG, Switzerland, that are even cheated down by 50 percent by all taxation tricks given on our Globe. This all is due to the splendid Stupidity of U.S. Government and the idi0ts around Tea Party, the finest Pinochet Types of Glencore and other Marc Rich criminals, who got for 30 years all Resources and Cash of…
Glencore is a deadly Mafia.Switzerland alone makes turnovers in trillions of Dollars with the CROOKS of raw material, oil, gas and name it. The profits go in the pockets of richest JUNK who arrange with Swiss governments, banks and their home officers not to pay any taxes. So the world loses all given stuff of nature and profits to criminal idi0ts, to be tortured to death. Glencore like all other raw material and energy giants here, pays less than 10 percent income tax on profits at ZUG, Switzerland, that are even cheated down by 50 percent by all taxation tricks given on our Globe you know.
Follow the due process from beginning to the finish. It is the duty of citizens to cooperate with court officers. Where foreign court officers are involved, then permission and support from local authorities is necessary. If tax evasion can be proved, then ZRA will channel proceeds to public projects, accordingly. It is doubtful that parent company ignored local legislation for fear of being caught cheating and paying heavy fines and loss of business.
Bembas say “lesa ni manyokola”. Glencore has been evading taxes in Zambia. So what will happen is that Glencore will definitely be penalized by the US government bilions of dollars. Then next year the American government will donate a litttle bit of the same money to Zambia thru PEPFAR for Arvs and all. The rest remains for US troops in Iraq and all over the world. That’s the way we get by
Thereafter, Glencore will go brutal on Zambia…evade tax brutally, don’t pay CEC and other suppliers. Until next time the American govt indirectly intervenes to give us crumbs
I wonder which Bembas these are. The Bembas of Zambia say “Lesa ni malyotola.
I dont like this Glencore guy Ivan Glasenberg. Hes a well known crook worldwide and he choose to conduct corrupt practices in vulnearable African countries like Nigeria, DRC, Zambia. This tumbling to 12 per cent Shares will send waves to Mopani as well and very soon we`ll start experiencing local contractors not being paid and massive retrenchments. Believe me!!
I have always been not a fan of Mopani. They made Zambia a nightmare ever since HH invited them in.
I told you. Sharon could not have been far away. She has already chipped in. Of course she will not ask any questions. Everything wrong in Zambia is HH’s fault according to Sharon. Thugs truned up at Mwansa Kapwepwe Airport in Ndola to deal with Miles Sampa in 2015 as he was seeking the PF presidency was all HH’s fault, drought in Zambia HH’s fault, Black Mountain tragedy HH’s fault, re-formation of Zambia Airways HH ‘s fault, death of Victoria Kalima HH ‘s fault.
I agree with you Sharon. Look at chi HH’s stooges trying to defend a clown for selling Zambia’s future for Ngwees. People like Chanchima.
HH was part and parcel of our mines being sold to these crooks. That oval headed man should not be allowed to talk about Zambian affairs within UPND. The UPND need new leadership. He and Ka chiluba sold Zambia’s resources for pennies. It is we the modern Zambian enterprise that should buy back our inheritance from these charlatans.
I know someone who worked for Mopani in a very senior position. He was getting $4,000 while all fellow management staff were getting around $10,000. He was the only Zambian in the top brass but they were even hiding information from him. Crooked HH and Mopani! Mopani even killed my childhood team of Nkana!!!
Do you see why I tried to pre-empty them the HH haters? They will not mention Francis Kaunda, after all he is not Tonga. It’s the reason I have not been a blogger. I had to join in and took to reading about post-colonial nation-building, and I want to add nation break-up also, because I want to understand how we got to this. Magande has revealed in his memoirs being serialized chapter by chapter how his plan to get Costain Chilala going as a big farmer was nearly shot down on purely tribal arguments on the ZIMCO board of directors.
So @#1, you do not know where HH got his money which he stacks in Panama? You think he got it by selling cattle in Namwala? HH and his group did a lot of inside trading. Ask him in privacy he will tell you what went on!
Exactly, some Zambians can be dull. HH sold our inheritance for a song and they are still supporting that crook.
There was a privatization programme going on and govt sought his services. He wasn’t the only one. Francis Kaunda, Elias Chipimo Jnr, Bwalya Chiti and his lawyer wife, Valentine Chitalu all did work for the ZPA during privatization and they were paid for it. HH invested his income in cattle ranching. Ask the others where they invested theirs.
Late Chris Chali and his Amayenge orchestra once sung KUSIYANA SIYANA KWA NCHITO KWACHA NDI IMODZI in the late 1980s I believe. We may differ politically but our economic interests are the same. Yet political decisions have economic consequences because some of the biggest economic decisions are made by politicians sitting in government. Chikwanda has left a big black hole in Zambian public finances which has affected the economic climate through high interest rates. This has affected the banks and later you Sharon, me Peter Sinkamba, Ngande Mwanajiti etc and through high bank charges.
Tapalati
This means we’re being cheated of our rightful share of taxes and royalties from Zambia’s natural resources.Blame is on you PFools.
Africa will never develop because we spend alot of time on history and very little or none on innovations. It is only through innovation that we will develop. Always crying how Chiluba or HH dribbled us will not take us anywhere. Bring ideas how we are going to correct the gloomy economic picture of this country.