FT recap from Friday.15 Dec 2019 17:02
Hold: Glencore (GLEN)
Glencore is trying to reduce debt while lower copper and cobalt prices cut into earnings.
Glencore has been hit with a third regulatory probe into its businesses, after the Serious Fraud Office (SFO) announced it is investigating “suspicions of bribery in the conduct of business” by the miner’s subsidiaries, “officials, employees, agents and associated persons”.
The development comes amid two probes in the US, and a finding of misleading accounting at a Canadian-listed subsidiary last year. Glencore’s shares fell 7 per cent on the news, to 221p.
In July 2018, Glencore was subpoenaed by the US Department of Justice in relation to its activities in the Democratic Republic of Congo (DRC), Venezuela and Nigeria stretching back more than a decade.
This year, the company confirmed the US Commodity Futures Trading Commission was probing whether Glencore and its subsidiaries had engaged in “corrupt practices in connection with commodities”. In between those disclosures, the Ontario Securities Commission issued a $22m (£17m) fine to Glencore’s 75 per cent-owned subsidiary Katanga Mining over the company’s lack of disclosure around its dealings with Israeli businessman Dan Gertler in the DRC.
The SFO investigation also comes two days after Glencore’s capital markets day, when chief executive Ivan Glasenberg told investors to expect more executive staff changes in 2020.
Since mid-2018, the company has seen the departures of several members of what Mr Glasenberg termed the “old guard”, though the chief executive said he would leave once a successor was clear from the new crop of Glencore leaders. This new group will have to get the all-important African copper decision back on track after government interventions and weak base metal prices have chipped away at its profitability.
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