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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing for news outlets such as iNVEZZ and…

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U.S. Subpoenas Oil Trader Glencore In Corruption Probe

Glencore

One of the world’s biggest oil and commodity traders Glencore has been ordered by the U.S. Department of Justice to produce documents and records about compliance with U.S. legislation against corruption and money laundering, the company said on Tuesday.

Glencore Ltd, a subsidiary of Glencore plc, has been subpoenaed by the U.S. Department of Justice with a subpoena dated July 2, 2018, “to produce documents and other records with respect to compliance with the Foreign Corrupt Practices Act and United States money laundering statutes,” the mining giant and oil trader said in a brief statement today.

“The requested documents relate to the Glencore Group’s business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to present,” added Glencore.

“Glencore is reviewing the subpoena and will provide further information in due course as appropriate,” the company said.

Following Glencore’s press release, its shares in London tumbled 12 percent, and were losing nearly 6 percent at 10:30 a.m. EDT on Tuesday.

Last month, Glencore settled a dispute with businessman Dan Gertler over Democratic Republic of Congo (DRC) operations, agreeing to pay in currencies other than U.S. dollars to avoid running afoul with the U.S. Treasury, which had sanctioned Gertler in December 2017. Back then, the treasury said that Gertler was a “billionaire who has amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals in the Democratic Republic of the Congo (DRC).”

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Tyler Broda, analyst at RBC Capital Markets, told the Financial Times, commenting on the U.S. subpoena for Glencore:

“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.”

According to Jefferies analyst Christopher LaFemina, the news of the subpoena further weighs on Glencore’s stock, increasing the “geopolitical overhang”, even if the U.S. Department of Justice doesn’t charge the company in the end.

By Tsvetana Paraskova for Oilprice.com

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