Glencore hit with investor lawsuit after bribery conviction

More than a dozen global investors are suing Glencore in London’s High Court, in a class-action-style lawsuit prompted by the company’s conviction of bribery earlier this year.

Sovereign wealth funds including Mubadala, the Kuwait Investment Authority, Norges Bank and the International Petroleum Investment Company have brought claims against the mining and commodity trading group, according to court documents.

Investors Abrdn and HSBC are also among the claimants, as are Phoenix Life, Standard Life, Reassure, and British Airways Pension Trustees.

While the cases have been opened, the particulars of claim documents setting out the allegations have not yet been filed.

However, people familiar with the matter said the claims related to investor losses suffered in 2011 and 2013 on the basis of the misconduct identified in the corruption probes.

Glencore, one of the world’s largest commodities traders, pleaded guilty to bribery this year following a Serious Fraud Office probe, with its penalty to be determined in November.

The bribery conviction is one of the highest-profile cases to have been won against a major trading house.

However, the conviction and fine have not held back Glencore’s share price, which is up 27 per cent since the start of the year.

The company reported record earnings of $18.9bn for the first half of this year, largely due to bumper profits in its coal business.

Glencore has set aside $1.5bn to pay the fines for its bribery convictions in the US, UK and Brazil. Similar investigations into misconduct are still under way in Switzerland and the Netherlands, while the US Department of Justice has said it may pursue individuals for their role in the bribery cases.

The successful prosecution in the UK follows a similar case in the US, where Glencore agreed to a fine of $1.1bn and pleaded guilty to bribery and market manipulation.

Glencore said in May it had taken significant steps to enhance its ethics and compliance programme.

“Glencore today is not the company it was when the unacceptable practices behind this misconduct occurred,” chair Kalidas Madhavpeddi said in May.

Glencore declined to comment on the new lawsuits.

Defendants listed in the new court filings alongside Glencore include former chief executive Ivan Glasenberg, former chair Tony Hayward and other top executives. Glasenberg stepped down from the top job and Hayward left as chair last year as part of a transition to a younger generation of leaders. Neither could immediately be reached for comment.