Legal & General sues Glencore in latest corruption fallout

Glencore has been hit with a fresh lawsuit from a big asset manager over alleged investor losses, prompted by the conviction for bribery of the commodities group last year.

In the latest legal fallout from the corruption scandal, Legal & General filed a claim against the mining and commodities trading group in London’s High Court last week.

The case concerns alleged losses to shareholders resulting from Glencore’s statements to the market, according to people familiar with the matter, in light of misconduct revealed as part of corruption probes.

The claim has been formally launched but the company has not yet filed legal documents setting out its allegations.

Glencore last year admitted multiple counts of bribery and market manipulation that took place for just over a decade until 2018 across Africa and Latin America. The case followed investigations by the US, UK and Brazilian authorities.

The fresh claim ratchets up pressure on the group, which has already been sued by more than a dozen global investors, including sovereign wealth funds Mubadala and the International Petroleum Investment Company. both based in Abu Dhabi, the Kuwait Investment Authority, and Norway’s Norges Bank.

L&G, which controls around £1.3tn in assets under management, is bringing the new case on behalf of pension, investment and insurance customers. It concerns disclosures that the company made to the market in 2011 and 2013, according to people familiar with the matter.

Those were the years in which Glencore, respectively, floated on the stock market in London and completed the takeover of Xstrata that diversified the trading house into mining and producing the commodities that it sells.

The fresh claim is expected to cover similar ground to that lodged last year, including by Abrdn and HSBC, as well as Phoenix Life, Standard Life, Reassure and British Airways Pension Trustees.

City law firms including Stewarts, Quinn Emanuel Urquhart & Sullivan and Bryan Cave Leighton Paisner have all been drafted in for claims, and BCLP partner Ravi Nayer is understood to have been hired by L&G.

Glencore and L&G declined to comment. At the time of the conviction, Glencore said it had strengthened compliance procedures in recent years and that it was “not the company it was”.

Glencore was ordered to pay £276mn by a UK judge last year after pleading guilty to seven counts of bribery in countries such as Nigeria and Cameroon between 2011 and 2016, following a Serious Fraud Office probe.

In total, Glencore set aside $1.5bn to pay fines for bribery convictions last year in the US, UK and Brazil. Similar investigations remain under way in Switzerland and the Netherlands. The US Department of Justice has said it may still pursue individuals for its role in the bribery cases.

Glencore reported record full-year earnings of $34bn on Wednesday, powered by high prices for coal, a commodity the company has stuck by even as other mining groups have divested assets producing the fossil fuel.

The bribery convictions have done little to hold back Glencore’s share price. The strong performance of its coal division helped power its shares at the start of this year to a record high and has made the stock one of the best-performing for many fund managers.