Glencore fined $314 million for ‘endemic’ bribery of African oil officials | CNN Business


CNN Business

Raw materials giant Glencore (GLCNF) has been ordered by a British court to pay a record £281 million ($314 million) fine for bribing officials across Africa to gain access to oil.

The UK government’s Serious Fraud Office (SFO), which brought the case against Glencore Energy UK, said on Thursday the sentence was the highest ever handed out for a criminal conviction in the country.

In June, the commodities trader admitted seven bribery charges in a London court. The fine announced Thursday includes a fine, legal costs and seizure of Glencore’s profits from its bribes.

“The behavior that took place was unforgivable and has no place in Glencore,” company chairman Kalidas Madhavpeddi said in a statement Thursday, adding that the company had taken “significant action” to build a new ethics and compliance program.

The SFO investigation found that between 2011 and 2016, Glencore had funneled approximately $29 million in bribes through its employees and agents in its oil operations in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan.

The money was used to ensure preferential access to larger loads and more valuable grades of oil, as well as preferred delivery dates, the SFO said earlier this year.

Judge Peter Fraser said on Thursday that “bribery was accepted as part of” [Glencore’s] The way of doing business of the West Africa desk” and was “endemic under” [its] traders.”

Bribes paid to state oil companies and ministries in Nigeria, Equatorial Guinea and Côte d’Ivoire were often concealed as an unspecified “service fee,” “signing bonus” or “success fee,” the SFO said, citing Glencore’s financial reports.

It also found that between 2012 and 2015, a Glencore trader and a Nigerian agent withdrew a total of $13.7 million in cash from Glencore’s Swiss cash register. The money was flown on a private jet to Cameroon, where it was used to bribe officials of the country’s national oil and gas companies.

In August 2011, two Glencore executives flew $800,000 in cash on a private jet from Switzerland to South Sudan. The money was recorded as an expense needed to open an office in the country, the SFO said. The money was paid to officials of the newly established government in South Sudan through a local agent.

Glencore said in May it had resolved investigations into separate bribery allegations filed by authorities in the United States and Brazil.

The company has $1.5 billion has been set aside to settle his lawsuits, including the British bribe, it said Thursday.

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