London court forces Glencore to pay record £281m for bribery in Africa

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The mining and commodities giant Glencore will be forced to pay £281m in fines, confiscated profits and costs as punishment for “sustained criminality”, the largest ever penalty imposed on a company in a UK court.

A judge at Southwark crown court in London on Thursday said offences by a UK subsidiary of Glencore showed high culpability for the “highly corrosive” offence.

Glencore received a one-third discount on the fine for pleading guilty to the bribery charges, which were brought by the UK’s Serious Fraud Office (SFO).

The court had heard how Glencore employees and its agents had given bungs worth $27m to unnamed officials in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan, causing harms worth $128m – £81m at the time of the offences.

Glencore employees flew cash bribes to Africa in private jets and used “sham” documents to hide the true purposes of cash, the SFO said. Senior Glencore employees signed off on cash withdrawals used for the pay-offs.

The company’s chair, Kalidas Madhavpeddi, attended the hearing in person for the second day, wearing a facemask in court.

Mr Justice Fraser said corruption was “endemic” within the African oil trading desk of Glencore Energy UK Ltd, which is wholly owned by the FTSE 100 company Glencore.

The SFO asked for anonymity for the employees who allegedly carried out the bribery while it considers whether to bring charges against individuals. The judge said he made no findings about individuals.

It was a landmark case for the SFO, as it was the first ever on charges of bribery of another person. Glencore also pleaded guilty on two charges of the related offence of failing to prevent bribery.

However, the penalties it will pay in the UK are still far below those levied by US authorities, despite the fact that Glencore is listed in London and that much of the corruption involved its west Africa desk based in the British capital.

Glencore has already set aside $1.5bn to cover costs related to the bribery charges. The company agreed in May to pay $1.1bn to US authorities for violations of bribery laws and commodity price manipulation, and had said before that it did not anticipate further costs.

Beyond the financial penalty and any further reputational harm, the consequences for Glencore may be limited.

Iskander Fernandez, a partner at the law firm Kennedys, said the primary concern would be that a bribery conviction prevents companies from bidding for some public contracts.

Shareholders including Abu Dhabi’s Mubadala and the Kuwait Investment Authority are also reportedly taking action against the company for damages to the value of its investments in the company.

“Bar the above, there is nothing else that would prevent a company from moving forward and carrying on with its business – albeit under the watchful eye of the public and/or regulators – following a conviction for bribery,” Fernandez said.

The SFO’s counsel argued on Wednesday that “corruption was endemic” within Glencore, but the company’s counsel said it had totally changed its culture since the bribery was first detected by US authorities in 2017.

The SFO had been hoping for penalties of as much as 3.5 times the value of the harms from the bribery. Glencore had admitted the harm.

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