Bribery and Fuel Price Manipulation... Glencore to Pay 1.9 Trillion Won in Fines

Investigation into Related Charges in the US, UK, and Brazil
Switzerland and the Netherlands Have Yet to Reach an Agreement

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Cha Min-young] Glencore, a multinational mining and commodities trading company headquartered in Switzerland, has agreed to pay sanctions amounting to 1.9 trillion KRW after admitting to bribery and crude oil price manipulation allegations in South America and Africa, according to foreign media including The Wall Street Journal (WSJ) on the 24th (local time).

According to foreign media, Glencore is accused of providing bribes exceeding 100 million USD (approximately 130 billion KRW) to government officials in Brazil, Nigeria, the Democratic Republic of Congo, and Venezuela. Damian Williams, the U.S. Manhattan federal prosecutor, described Glencore's bribery as "enormous," explaining that "bribes were given to secure oil contracts, avoid government audits, and even to judges to dismiss lawsuits." Glencore is also accused of manipulating heavy oil prices at two U.S. ports.

Glencore has admitted to these allegations raised by investigative authorities in the U.S., the U.K., and Brazil, agreeing to pay 1.1 billion USD (approximately 1.4 trillion KRW) in the U.S. and 40 million USD (approximately 50 billion KRW) in Brazil. According to the U.S. Department of Justice, this sanction is the largest ever imposed for a conspiracy to manipulate crude oil market prices. Glencore expects that the total sanctions, including those to be paid to the U.K., will not exceed the 1.5 billion USD (approximately 1.9 trillion KRW) provisioned in February for related liabilities.

Glencore has yet to reach an agreement regarding ongoing investigations in Switzerland and the Netherlands. Foreign media pointed out that while Glencore’s traders have been indicted and pleaded guilty to bribery or price manipulation charges, the company’s top executives have not yet been charged. The U.S. Department of Justice continues to conduct related investigations.

In response, Gary Nagle, Glencore’s Chief Executive Officer (CEO), stated in a press release that day, "We acknowledge the illegal activities identified in this investigation and have cooperated with the authorities," adding, "Such conduct will no longer occur at Glencore."