Shares in Glencore (LON:GLEN) have fallen deep into the red in today’s session as the blue-chip group disclosed that it has received a subpoena from the US Department of Justice (LON:DoJ) relating to possible corruption and money-laundering. The news comes after the commodities giant recently settled a legal fight last month in the Democratic Republic of Congo (DRC) over a copper mining joint venture.
As of 10:26 BST, Glencore’s share price had given up 11.87 percent to 307.85p, as compared with a 0.37-percent gain in the benchmark FTSE 100 index. The blue-chip group’s shares are up by nearly three percent over the past year.
Glencore receives subpoena
Glencore disclosed in a short statement this morning that it had received a subpoena dated July 2 from the US Department of Justice to produce documents and other records related to compliance with the Foreign Corrupt Practices Act and US money laundering statutes. Reuters noted in its coverage of the news that the Foreign Corrupt Practices Act makes it a crime for companies to bribe overseas officials to win business.
The FTSE 100 group said that the requested documents related to its business in Nigeria, the DRC and Venezuela from 2007 to present.
“Glencore is reviewing the subpoena and will provide further information in due course as appropriate,” the commodities giant noted in the statement.
Analysts weigh in
“Given the flow of negative news we’ve had through the course of this year, the knee jerk reaction is worse than it otherwise might have been,” Hunter Hillcoat, an analyst at Investec Securities Ltd, told Bloomberg News by phone in relation to the slump in Glencore’s share price. “The DoJ fines can be big, but to wipe out 10 percent of the market cap would be bigger than any fine I can recall.”