The announcement caused Glencore’s share price to plunge by more than 12 percent on the London Stock Exchange, where it is listed — its biggest fall in two years, according to Bloomberg.
The Swiss-based corporation said it had received a subpoena on Monday from the US Department of Justice “to produce documents and other records with respect to compliance with the Foreign Corrupt Practices Act and United States money laundering statutes.”
“The requested documents relate to the Glencore Group’s business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to present,” it said in a statement.
Glencore added it was “reviewing the subpoena and will provide further information in due course as appropriate,” without providing further details.
Glencore may also be facing a British fraud probe over its operations in the DR Congo, Bloomberg reported in May.
On Tuesday, Britain’s Serious Fraud Office refused to comment on whether such a probe was indeed under way.
“Metals giant Glencore is under pressure,” said Fiona Cincotta, senior market analyst at trading firm City Index.
“The fear for investors is that the firm will likely be hit by a substantial fine if found guilty of fraud and money laundering, the size of which will be subject to significant speculation,” said Joshua Mahony, market analyst at IG.
In March 2017, international watchdog Global Witness accused Glencore of paying more than $75 million to Israeli businessman Dan Gertler, who has close links to DR Congo’s president, Joseph Kabila.
Glencore at the time denied any wrongdoing.
The company’s activities in DR Congo were also highlighted in the so-called Paradise Papers, a trove of 13 million documents that highlighted the use of offshore tax havens by large corporations.
Gertler has been under US sanctions since December 2017 over his dealings in DR Congo.
The sanctions were imposed under US legislation adopted in 2016 which allows for sanctions on anyone deemed responsible for human rights violations or gross corruption.
DR Congo has been mired in unrest over Kabila’s grip on power. He has faced unprecedented protests in recent months urging him to step down after his term expired in December 2016. New elections are scheduled to take place on December 23. DM