Glencore Shares Plunge After Justice Department Subpoena

Glencore Shares Plunge After Justice Department Subpoena

Ads by Revcontent

LONDON — Glencore, a Switzerland-based mining and commodities trading giant, said on Tuesday that it had received a subpoena from the United States Department of Justice requesting documents in a money laundering and corruption investigation.

The subpoena is tied to Glencore’s dealings in the Democratic Republic of Congo, Nigeria and Venezuela from 2007 to the present day, and it seeks material related to “compliance with the Foreign Corrupt Practices Act” and with United States money laundering rules, the company said in a statement.

News that American investigators were looking in to Glencore’s businesses spooked investors, sending the company’s share price down about 9 percent by midday in London. The stock had fallen more than 13 percent at one point.

Glencore, which says it has 146,000 employees and contractors around the world, is something of a maverick among large mining companies. Based in Baar, Switzerland, it differs from its rivals because it is a major trader of oil, metals and other commodities, as well as having significant mining activities.

The company is a large copper miner and a major producer of cobalt, used in batteries for electric vehicles and electronic devices, in Congo and elsewhere. It is also a major player in coal, with 26 mines in countries such as Australia, Colombia and South Africa. Glencore says that having its finger on the pulse of the flow of these commodities around the world allows it to anticipate trends and, by also being an active trader, profit from them.

Glencore traces its origins to the operations of the trader Marc Rich, who was indicted on tax evasion charges in the United States and was later pardoned by President Bill Clinton. Since 2002, the company has been led by Ivan Glasenberg, who began his career at the company as a coal marketer. Mr. Glasenberg owns 8.4 percent of the company’s shares.

Glencore’s stock price fell sharply in 2015 when commodity prices plunged, prompting investors to worry about whether the company could meet its debt obligations. The share price had partly recovered when commodity prices rose, and after the company sold off assets to reduce debt.

Charles Watenphul, a Glencore spokesman, said, “We got this letter last night; we are going through it.”

(Original source)

Ads by Revcontent
The Note: Does Cohen's declaration of independence spell trouble for Trump? « Previous The Note: Does Cohen's declaration of independence spell trouble for Trump?
Next » Lyft and Uber Won’t Be Happy Until They’re Your One-Stop Transit Guide Lyft and Uber Won’t Be Happy Until They’re Your One-Stop Transit Guide