Glencore share price: Group faces lawsuits over US subpoena

Shareholders accuse company of false and misleading disclosures

Glencore share price: Group faces lawsuits over US subpoena

Glencore (LON:GLEN) faces at least two lawsuits by US shareholders accusing the company  of having made false and misleading disclosures before it received a US subpoena, Reuters has reported. The news marks a blow for the Anglo-Swiss commodities giant which revealed yesterday that it had set up a committee to respond to the Department of Justice (DoJ) subpoena over possible corruption and money-laundering.

Glencore’s share price tumbled in the previous session, giving up 4.83 percent to close at 311.15p. The stock underperformed the broader market selloff which saw the benchmark  FTSE 100 index lose 100.08 points to end the session 1.30 percent lower at 7,591.96. This morning, the shares have inched marginally higher, largely in line with the Footsie.

Glencore faces investor lawsuits

Reuters reported yesterday that Glencore shareholders had filed a lawsuit with the US District Court in Newark on Monday, and another one with the US District Court in Manhattan yesterday. They accused the commodities giant of concealing how its conduct would subject it to heightened regulatory scrutiny into its compliance with money laundering and bribery laws, including the US Foreign Corrupt Practices Act.

Chief Executive Ivan Glasenberg is a defendant in both lawsuits, and Chief Financial officer Steven Kalmin is a defendant in the New Jersey lawsuit. Both lawsuits seek unspecified damages.

Analysts weigh in on subpoena

The FTSE 100 commodities giant recently disclosed that the DoJ had requested documents related to company’s business in Nigeria, the DRC and Venezuela from 2007 to present. Reuters reports that some analysts have said that the subpoena might have resulted from Glencore’s settling of a mining dispute in Congo with Israeli billionaire Dan Gertler, under US sanctions since last year, by agreeing to pay royalties in euros.

As of 08:03 BST, Thursday, 12 July, Glencore Xstrata PLC share price is 314.15p.

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