Key points:
- Glencore alleged to have used private jets to transfer bribes
- The SFO said Glencore UK Limited paid or did not prevent the payment of bribes
- Glencore shares are down Thurday
Glencore (LON: GLEN) employees and agents are said to have used private jets to move cash to pay bribes to oil officials in West Africa, prosecutors told a court in London on Wednesday.
Britain's Serious Fraud Office (SFO) explained in Southwark Crown Court that Glencore Energy UK Limited paid or did not prevent millions of dollars in bribes being paid to officials in five African countries.
The UK subsidiary reportedly pled guilty in June to seven bribery charges.
The company said in May that it expected to pay up to $1.5 billion concerning bribery and market manipulation allegations in the United States, Brazil, and Britain.
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The UK subsidiary was accused of paying bribes to officials at Cameroon's national oil and gas firm through an oil trader on the West Africa desk at its London offices in order to ensure “favourable treatment” for the sale of crude oil.
Prosecutor Alexandra Healy argued in court that an unidentified Glencore employee was helped by the company's agent in Nigeria, where the cash was withdrawn. It was then said to have been transported to Cameroon by private jet. In addition, Healy explained that another unidentified Glencore employee requested the withdrawal of $800,000 in cash from the company's International AG cash desk in Switzerland before taking a private jet to South Sudan with a colleague, with the cash then paid to Glencore's agent in the country. The money was then allegedly used to bribe government officials who had the ability to influence the allocation of crude oil cargoes.
Healy stated that Glencore pleaded guilty to five counts of bribery concerning a total of $26.9 million in payments, which were made “primarily [to] officials in state-owned oil companies.” Glencore also pleaded guilty to two counts of failing to prevent bribery in connection with payments of around $1 million to agents in Equatorial Guinea and South Sudan, of which was used to pay bribes to secure “important oil contracts.”
The SFO is still continuing its investigation, while the judge is scheduled to rule on the severity of the penalty on Thursday.
Glencore shares are down 1% at the time of writing.