Mining giant Glencore flew cash bribes to Africa via private jet, UK court hears

Glencore flew cash bribes to officials in Africa via private jet amid “endemic” corruption within the mining company, a London court has heard, in sentencing of the first ever UK corporate conviction on charges of bribing another person. Third-party agents used Glencore’s money to bribe officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan, causing harms worth $128m, a sentencing hearing at Southwark crown court heard. A UK subsidiary of the FTSE 100 company pleaded guilty in June to five counts of bribery, and two counts of failing to prevent bribery brought by the UK’s Serious Fraud Office (SFO).

Alexandra Healy KC, the SFO’s counsel, told the court that Glencore was involved in the payment of bribes worth $27m. The $128m in harms were worth £81m at the time of the offences, and were “authorised at a senior level”, Healy said. The SFO reviewed more than 1m documents, as part of the large and complex investigation.

In a mark of the case’s importance to the SFO, its director, Lisa Osofsky, visited the agency’s case team ahead at Southwark crown court before the hearing. The Glencore chairman, Kalidas Madhavpeddi, attended the hearing in person, in what Glencore’s counsel, Clare Montgomery KC, described as a mark of a “change in culture” at the company. “The conduct was inexcusable,” said Montgomery.

“The company unreservedly regrets the harm caused by these offences. ” The bribery was first detected by the FBI in 2017, and Glencore agreed in May to pay $1. 1bn to US authorities for violations of bribery laws and commodity price manipulation.

The judge at Southwark crown court, Mr Justice Fraser, is expected to sentence Glencore Energy UK Ltd on Thursday, taking into account the harm admitted by Glencore and other factors such as how culpable the company was. Healy argued that it ranked as a more serious offence because the company played a “leading role in organised, planned, illegal activity” that was “authorised at a senior level”. However, Glencore anticipates the penalties it is likely to pay in the UK will be smaller than the US.

In May, it said it did not anticipate having to set aside more than its earlier $1. 5bn provision to cover all the costs related to the bribery. The court heard detailed descriptions of how Glencore and its agents repeatedly sought to corrupt public officials.

On one occasion, an agent told Glencore to hurry cash payments because he had “staff to make happy before Christmas” – a reference to a bribe in Nigeria. On another occasion, an agent of Glencore boasted in an email that he had secured deliveries of crude from Equatorial Guinea’s state-owned oil companies after using family connections to meet the country’s President Teodoro Nguema Obiang , who has ruled the country since 1979. Sign up to Business Today Free daily newsletter Get set for the working day – we’ll point you to the all the business news and analysis you need every morning Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties.

For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. Glencore employees were also directly involved in withdrawing cash to be used in bribes.

The SFO successfully applied for several former employees and agents to be anonymised during the trial because it is considering further charges. The SFO detailed how a Glencore trader on the West Africa desk withdrew a total of €6. 3m (£5.

4m) in cash from the company’s cash desk in Baar, Switzerland, to fund bribes on 25 separate occasions between 2012 and 2015. Those withdrawals had to be signed off by senior employees, one of whom was a Glencore “business ethics officer” and the other who was a member of the company’s “business ethics committee”. In South Sudan, Glencore officials travelled by private jet to the country shortly after its independence in 2011 with $800,000 in cash.

That cash was falsely described as for “opening office in South Sudan, cash for office infrastructure, salaries, cars etc”, but was instead handed to agents who used it to bribe officials. “Within days of the arrival of the cash in [the capital] Juba on 2 August 2011, Glencore’s fortunes changed” and it gained valuable contracts, said the SFO’s counsel. Healy said there was a “stark contrast between the true culture of the company and that set out in” its anti-money laundering policies.

The SFO carried out 72 hours of interviews with Anthony Stimler, a former Glencore trader who confessed to US bribery charges last year. Stimler said “the bribery that I witnessed then, and in my second phase became involved with, was condoned” by a senior Glencore employee. .