Shares in mining giant Glencore (GLEN) dropped sharply after the UK’s Serious Fraud Office (SFO) announced that it has opened an investigation into the firm on suspicions of bribery.
Glencore’s share price dived almost 7% following the announcement this afternoon, to 222p.
It has been reported previously that the SFO was preparing a formal investigation into Glencore over its dealings in the Democratic Republic of Congo.
In a short statement Glencore said it has been ‘notified today that the Serious Fraud Office (SFO) has opened an investigation into suspicions of bribery in the conduct of business of the Glencore group.’
It added, ‘Glencore will co-operate with the SFO investigation.’
The SFO confirmed it is ‘investigating suspicions of bribery in the conduct of business by the Glencore group of companies, its officials, employees, agents and associated persons.’
ALREADY UNDER THE MICROSCOPE
The company is already under investigation from the Department of Justice (DOJ) and Commodity Futures Trading Commission (CFTC) in the US.
The DOJ is probing Glencore over money laundering related to its operations in Nigeria, Venezuela and the Democratic Republic of Congo, while the CFTC is probing Glencore over potential corrupt practices linked to commodities.
An in-depth feature by Bloomberg in November last year detailed alleged corrupt practices as Glencore looked to gain access to huge cobalt deposits in the Democratic Republic of Congo.
Demand for cobalt, often described as ‘blue gold’, is expected to rocket in the next decade in line with what is forecast to be rapidly rising electric vehicle demand.
Cobalt, along with copper, nickel and lithium, is a key component in the batteries that power electric vehicles.
