Sheikh Mansour’s firm weighs in to Glencore legal battle

An investment giant backed by Sheikh Mansour – the owner of Manchester City – has joined a group of powerful funds to sue FTSE100 group Glencore over a scathing bribery case.

Mubadala Investment Company, an Abu Dhabi sovereign wealth fund of which the sheikh sits on its board, is pursuing the crisis-stricken Anglo-Swiss multinational trading and mining company in a concerted effort along with dozens of other major companies including HSBC and Standard Life. .

Glencore was ordered to pay £281 million last week by a London court. The Serious Fraud Office (SFO) said group subsidiary Glencore Energy UK has enabled the payment of millions of dollars in bribes to officials in five African countries.

Prosecutors said Glencore’s employees and agents used private jets to transfer cash to pay for the bribes.

Hopes to draw a line under the scandal have been dashed after documents seen by The Mail on Sunday revealed a spate of incoming legal claims against Glencore, which could amount to billions of pounds, experts say.

There are fears the lawsuit could run against Glencore for years and could entangle board members past and present, including former chief executive Ivan Glasenberg and current non-executive director Peter Coates.

The bribery case involves approximately $26 million (£23 million) paid from 2011 to 2016 to officials of crude oil companies in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan.

A judge said the case “showed not only significant crime but sophisticated devices to disguise it,” adding that corruption was “endemic” among Glencore’s merchants.

Plaintiffs include Mubadala – where Mansour is deputy chairman – British Airways pension fund, investment giant Abrdn and Wirral Council. Other sovereign wealth funds involved are the Kuwait Investment Authority and the Norwegian Norges Bank. The allegations are believed to relate to losses suffered by shareholders in the wake of the bribery and corruption investigations. The plaintiffs are expected to allege that news of the investigations has wiped out billions of pounds of Glencore’s worth.

Southwark Crown Court recently fined Glencore around £183million – which was reduced from £274million after the company filed a guilty plea. A confiscation order of £93.5 million was also issued and it was ordered to pay £4.6 million towards the costs of the SFO. Earlier this year, Glencore reached a £957 million settlement with the US Department of Justice.

Iskander Fernandez, a white-collar crime attorney in the city, said the new civil case could cast a “huge cloud” over the company.

He said: “It would have been great if the company had said it was condemned and moved forward with a fundamental change in the organization, but it will now be put back in the spotlight.”

The lawsuit could require Glencore to submit historical evidence and cross-examine senior Glencore executives.

Current chairman Kalidas Madhavpeddi recently described the bribery as “unforgivable” and stressed that the company is “committed to operating transparently”.

Giuseppe Bivona – an activist investor at Bluebell Capital – said the situation at Glencore has become “unsustainable.” He added that there is a “significant culture problem at the company.”

Chief executive Gary Nagle defended the company in a recent statement, saying: “This kind of behavior has no place in the group.”

Glencore is currently worth over £65 billion. The inventory value has not decreased since the claims were filed.

Ben Lewis, a mining expert at Liberum Capital, said: ‘The challenges for Glencore are more in their rearview mirror than worrying about what’s to come.’

Glencore and the plaintiffs’ legal representatives declined to comment.