Yahoo Finance Glencore flew millions in bribe money to Africa on private jets, court hears
Glencore bribed government officials using millions of pounds in cash that had been transported around Africa on private jets, a court heard on Wednesday.
Ahead of the mining company’s sentencing in Southwark Crown Court, lawyers for the Serious Fraud Office (SFO) revealed the bribery schemes used by employees and their bosses to gain preferential access to oil cargoes.
In one example, a senior Glencore employee withdrew $800,000 (£696,980) from the company’s Swiss cash desk before flying the money by private jet to South Sudan, where it was then handed to middlemen who used it to bribe local officials.
The employee recorded the cash withdrawal as being for an office opening in the country but “that was false”, said Alexandra Healy KC, representing the SFO.
Another example saw Glencore send €4.2m to middlemen who withdrew the money in Nigeria before transporting it – often by private jet – to Cameroon, where it was used by Glencore employees to bribe government insiders.
The efforts were coordinated from London, where the company’s oil trading business is based, and focused on securing cargoes of valuable grades of oil at the most opportune times, giving it an unfair advantage over competitors, the SFO said.
Ms Healy said Glencore attempted to “disguise” the bribery through so-called addenda to agreements with middlemen, “to give the illusion that the payments were legitimate”.
She added that the company ostensibly had a string of internal guidelines designed to prevent such corrupt payments but these were “largely ignored because corruption was condoned”, including at senior level.
The company has admitted to seven counts of bribery in Nigeria, Cameroon, the Ivory Coast, Equatorial Guinea and South Sudan and is expected to be sentenced by judge Mr Justice Fraser on Thursday.
The SFO’s prosecution is the culmination of a complex and years-long effort that saw investigators review more than a million documents and interview witnesses for dozens of hours.
On Wednesday, the SFO argued that illegal conduct was so serious and widespread at Glencore that it required the highest threshold of fine.
The estimated amount of “harm” done by the company’s corrupt activities from 2012 to April 2016 is £81m.
Under sentencing guidelines, the recommended “starting point” fine for such an offence is 300pc of that figure, or £243m.
The final fine will be decided by Mr Justice Fraser, who will also take account of mitigating factors such as Glencore’s cooperation with the SFO, reforms at the company and changes of senior management.
While Glencore itself has pleaded guilty in the UK, the SFO has yet to bring charges against any individuals who were allegedly involved.
The agency is investigating 11 former employees and aims to decide whether to charge them by April.
There are 17 “implicated” individuals but Mr Justice Fraser ruled that they cannot be named for legal reasons.
The company has separately been charged in the US where it has agreed a $1bn settlement with authorities.
Kalidas Madhavpeddi, Glencore’s chairman, said earlier this year that the company today is “not the company it was when the unacceptable practices behind this misconduct occurred”.
At Wednesday's hearing, Glencore's lawyer said the company “unreservedly regrets the harm caused by these offences”.
Clare Montgomery said there had been an extensive program of corporate reform since the charges. “The chairman and the board who now run the company are committed to it in the future.”
Kalidas Madhavpeddi, Glencore's chairman, attended in person but declined to comment when approached.
