Legal & General sues Glencore in latest corruption fallout

Glencore has been hit by a new lawsuit from a major wealth manager over alleged investor losses sparked by the commodities giant’s bribery conviction last year.

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

The case concerns alleged losses to shareholders resulting from Glencore’s statements to the market amid wrongdoing revealed during corruption investigations, according to people familiar with the matter.

The lawsuit has been officially filed, but the company has yet to file any legal documents outlining its claims.

Glencore acknowledged multiple cases of bribery and market manipulation last year that took place in Africa and Latin America for just over a decade through 2018. The case was preceded by investigations by the US, British and Brazilian authorities.

The new lawsuit adds 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 £1.3 trillion in assets under management, is bringing the new case on behalf of pension, investment and insurance clients. These are disclosures the company made to the market in 2011 and 2013, according to people familiar with the matter.

Those were the years when Glencore went public in London and completed the acquisition of Xstrata, which diversified the trading house into mining and producing the commodities it sells.

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The new lawsuit is expected to cover similar grounds to those filed last year, including by Abrdn and HSBC, as well as Phoenix Life, Standard Life, Reassure and British Airways Pension Trustees.

Law firms in the city including Stewarts, Quinn Emanuel Urquhart & Sullivan and Bryan Cave Leighton Paisner have all been confiscated for claims and BCLP partner Ravi Nayer is said to have been hired by L&G.

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

Glencore was ordered to pay £276m by a UK judge last year.

In total, Glencore committed $1.5 billion to pay fines for bribery convictions in the US, UK and Brazil last year. Similar investigations are still ongoing in Switzerland and the Netherlands. The US Department of Justice has said it can continue to prosecute individuals for their role in the bribery cases.

Glencore reported record full-year profit of £34 billion on Wednesday.

The bribery convictions did little to slow down Glencore’s share price. The coal division’s strong performance helped push shares to record highs earlier this year and has made the stock one of the best-performing stocks for many fund managers.


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