Canada Says Glencore Hid Congo Risks From Investors -- 2nd Update
17 Dezembro 2018 - 6:17PM
Dow Jones News
By Scott Patterson
Canada's main stock-market regulator said a Glencore
PLC-controlled copper-mining company hid from investors the risks
associated with its reliance on Israeli businessman Dan Gertler in
the Democratic Republic of Congo.
The Ontario Securities Commission said Glencore's Katanga Mining
Ltd. relied upon, and paid associates of, Mr. Gertler to "maintain
relations" with the Congolese government, including legal, tax and
customs clearing services.
The Wall Street Journal reported Sunday that Katanga and several
of its executives and former directors had agreed to pay more than
30 million Canadian dollars (US$22 million) to settle the
allegations, which also include claims that the company overstated
copper production over the course of several years.
The OSC said it would hold a hearing on the settlement in
Toronto on Tuesday.
Glencore owns about 86% of Katanga after buying out Mr.
Gertler's stake in the mining company in 2017. The OSC alleged that
starting in 2010, a close associate of Mr. Gertler's was "tasked
with the responsibility for engaging" with the Congolese government
on Katanga's behalf.
In 2013, a unit of Katanga formalized the relationship by
entering into a contract for services with De Novo Congo SPRL, a
company associated with Mr. Gertler, the OSC said. The Journal
first disclosed the contract with De Novo in July.
The OSC also alleged that a unit of Katanga Mining for several
years failed to disclose that it had diverted more than $100
million in royalty and other payments from Congo's state-run mining
company to a company controlled by Mr. Gertler. The payments were
shifted to Mr. Gertler at the request of the Congolese state mining
company, the OSC said.
A Glencore spokesman declined to comment after the OSC news
release on Monday. A spokesman for Fleurette Group, Mr. Gertler's
main company in Congo, said it "has always acted appropriately and
with integrity in the DRC. Nothing has ever been proven against the
company or its executives in a court of law." Mr. Gertler has
denied wrongdoing.
Mr. Gertler was a central figure in a $412 million settlement
between the U.S. Justice Department and the Securities and Exchange
Commission with New York hedge fund Och-Ziff Capital Management
Group LLC. An Israeli businessman paid more than $100 million in
bribes to Congolese government officials, including Congo President
Joseph Kabila, to get beneficial terms for deals in the Central
African country, the Justice Department and SEC alleged. The
Israeli businessman was Mr. Gertler, according to people familiar
with the matter.
A year ago the U.S. Treasury Department sanctioned Mr. Gertler,
alleging he traded on a friendship with Mr. Kabila to amass a
fortune through "opaque and corrupt" deals on behalf of
multinational companies seeking to do business in Congo.
Glencore said in July that it had received a subpoena from the
U.S. Justice Department demanding records related to its compliance
with American antibribery and money-laundering laws in Congo,
Nigeria and Venezuela. The Journal reported that a focus of the
probe is Glencore's ties to Mr. Gertler.
Write to Scott Patterson at scott.patterson@wsj.com
(END) Dow Jones Newswires
December 17, 2018 15:02 ET (20:02 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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