File Photo: IOL
JOHANNESBURG – The world's biggest commodities trader, Glencore, on Friday saw its share on the JSE slump nearly 4 percent after US authorities circled the firm over yet another alleged clandestine business dealing.

Glencore closed the trading session 3.75 percent down at R52.75 as the company announced that the US Commodity Futures Trading Commission (CFTC) was investigating whether it and its subsidiaries may have violated certain provisions of the Commodity Exchange Act through corrupt practices in connection with commodities.

“Investigations are at an early stage and have a similar scope in terms of subject matter as the current ongoing investigation by the US Department of Justice (DoJ)," Glencore said.

“Glencore will co-operate with the CFTC. Glencore’s response will be managed by its investigations committee, which was set up in July 2018 to oversee Glencore’s response to the investigation by the DoJ.”

The probe by US authorities comes after the dual-listed company was subpoenaed last year by the DoJ department for documents relating to its dealings in Nigeria, the Democratic Republic of Congo (DRC) and Venezuela since 2007. Peter Jones, campaign leader at Global Witness, said the latest announcement further demonstrates that the heat is on for Glencore and its executives.

“The CFTC investigation is another promising step towards holding Glencore to account for its suspect dealings and showing that this corporate behemoth is not above the law,” Jones said.

“At Global Witness, we have exposed the company's murky mining transactions in the DRC with sanctioned businessman Dan Gertler, a close friend of the former Congolese president, Joseph Kabila. These deals have potentially robbed the Congolese people of billions of dollars.”

The Glencore-controlled mining company Katanga Mining has agreed to pay $22 million (R315.53m) to settle allegations by Canadian regulators that it had failed to comply with disclosure requirements, including that it had not properly described risks of doing business with a controversial middleman in the DRC.

Katanga Mining, a unit of Glencore, this month named Glencore Coal’s chief development officer, Jeff Gerard, as the head of Glencore’s assets in the DRC and to oversee its Mutanda mining operation in the country.

The company has also come under financial pressure after it missed its 2018 full-year estimates, while it is also facing a changing regulatory environment in the DRC.

In its annual report, Glencore disclosed that it incurred $24m in legal costs last year related to the DoJ investigation.