A middleman paid by Glencore flew cash in private jets across Africa to bribe officials, a London court said on Wednesday.
A British subsidiary of the commodities trader and mining group is being tried in Southwark Crown Court this week after pleading guilty to seven counts of bribery in countries from Nigeria to Cameroon in June following an investigation by the Serious Fraud Office.
Glencore has provided $1.5 billion to resolve a number of global investigations, including approximately $1.1 billion for US government agencies. The fine for the UK will be set on Thursday.
The SFO’s investigation focused on Glencore’s London office and its West Africa desk, which sourced oil across the continent.
On Wednesday, a lawyer representing the SFO said Glencore had paid a Nigerian middleman more than €4 million disguised as service fees.
Money was transported, often via private jet, from Nigeria to Cameroon to a Glencore oil trader, who used it to pay bribes, according to the SFO, paying $13.7 million to officials at Cameroon’s national oil and gas company and the country’s national refinery became three years ending March 1, 2015.
The court heard that Glencore had used a Swiss “cash register” to issue money to be used for bribery. The trader at the West Africa desk withdrew €6.3m in cash from that desk via a series of transactions listed as ‘office expenses’.
Kalidas Madhavpeddi, Glencore’s non-executive chair who replaced Tony Hayward in a leadership overhaul last year, and general counsel Shaun Teichner were both in court on Wednesday.
Clare Montgomery KC, a Glencore representative, said the company’s behavior was “inexcusable” and “has no business at Glencore” but “these practices do not exist in any form in any of the Glencore companies today”.
The SFO accused Glencore Energy UK in May of profit-seeking corruption related to its oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan.
The Anti-Graft Agency’s investigation found that the company had paid more than $28 million to agents and intermediaries to secure preferential access to oil, increased cargo, valuable oil grades and preferred delivery dates.
On Wednesday, the agency unveiled a system in which Glencore traders disguised payments to make it appear they were “legitimate services”.
The court heard the SFO had received evidence from Anthony Stimler, a British national who worked at the company’s West Africa desk until 2019 and pleaded guilty in the US last year. He confirmed that payments to the Nigerian agent were a “sham” to disguise their true purpose.
Glencore is the first company to be prosecuted by the UK Serious Fraud Office for paying bribes and has pleaded guilty to five counts.
Glencore has pleaded guilty to two separate U.S. criminal counts and agreed to pay approximately $1.1 billion in fines and forfeiture. Prosecutors in the US and UK agreed to focus on different time periods of the offenses to avoid double jeopardy.