197 Funds Seek Damages from Glencore Over Allegations of Misleading Statements
A total of 197 investment funds, including those managed by major firms like Abrdn, Fidelity, HSBC, Invesco, Legal & General, and Vanguard, are pursuing legal action against Swiss mining giant Glencore. They allege that Glencore made misleading or untrue statements in its prospectuses to conceal corrupt activities.
The claimants contend that they suffered financial losses directly resulting from "untrue statements" and omissions in Glencore's 2011 prospectus for its London Stock Exchange listing. They are also suing for misleading information in the company's 2013 prospectus related to its merger with Anglo-Swiss mining company Xstrata.
Among the claimants are sovereign wealth funds such as GIC, Norges Bank, Aabar Holdings, and the Kuwait Investment Authority, as well as major pension funds including those of Scottish Widows, BP, and Shell.
The allegations against Glencore suggest that senior management had knowledge of or were reckless about the existence of "bribery, corruption, and fraud." These instances of bribery encompass copper and cobalt acquisitions in the Democratic Republic of Congo, oil trading in various regions including West Africa, South Sudan, Brazil, and Venezuela, as well as fuel oil price manipulation in the US.
The group of investors holds cumulative holdings in Glencore valued at over $4.7 billion. The case will be heard in London's High Court. This legal action follows Glencore's admissions of guilt last year in connection with corruption allegations. To settle probes into bribery and market manipulation, the company agreed to pay penalties of up to $1.5 billion, including $1 billion in the US, $355 million in the UK, and $40 million in Brazil.
In the US, Glencore faced accusations of violating the Foreign Corrupt Practices Act and engaging in a multi-year scheme to manipulate commodity prices at major shipping ports. In the UK, the company was charged by the Serious Fraud Office (SFO) with seven counts of profit-driven bribery and corruption related to its oil operations in several African countries. According to the SFO, Glencore agents paid bribes exceeding $25 million to gain preferential access to oil in these regions.
Glencore's CEO, Gary Nagle, acknowledged the misconduct identified in these investigations and emphasized the company's commitment to being a responsible and ethical operator.
As of now, Glencore has not filed its defense and has not immediately responded to requests for comment regarding the latest allegations.
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