Business Maverick


Disgraced Glencore comes out swinging in defence of Ramaphosa

Disgraced Glencore comes out swinging in defence of Ramaphosa
The headquarters of Glencore International plc in Baar, Switzerland, on 19 March 2012. (Photo: Gianluca Colla / Bloomberg via Getty Images)

Global resources giant Glencore issued a statement on Wednesday noting with ‘concern’ the South African fallout from the deals and massive fines it has stitched together to settle scathing findings of criminal conduct. Among other things, it has come out swinging in defence of President Cyril Ramaphosa. With friends like these...

Glencore’s shadowy dealings have been slowly coming to light – a while back it set aside $1.5-billion in provisions for penalties it expected to pay as investigations into the extent of its rot wrapped up. 

On 24 May, the US Department of Justice announced that Glencore had pleaded guilty to foreign bribery and market manipulation schemes and agreed to pay fines of over $1.1-billion. Fines from other jurisdictions are in the pipeline. 

Glencore to pay $1.1bn fine after pleading guilty to graft and market manipulation

Glencore’s crimes were committed in several countries including the US, the Democratic Republic of Congo and Nigeria. South Africa has not been mentioned, which could be taken as a rare example of a good news story on the domestic corruption front. 

Here was a global criminal syndicate that was – per the US Department of Justice – engaged in bribery on a “staggering” scale. 

Yet somehow, South Africa – run by what detractors claim is its own criminal syndicate called the ANC – was not tainted by Glencore’s graft. It’s almost too good to be true! Imagine the Sopranos doing work in Sicily with no hint of malfeasance. 

This has, of course, sparked some chatter in the local media – there was the Optimum Coal deal and all that jazz involving the Gupta brothers and a certain former mining minister, whose criminal conduct still belongs in the “alleged” category. Also involved was a Swiss-based enterprise which has now shown to have been criminal. 

And politicians have also entered the fray. The Economic Freedom Fighters reportedly want the SA Revenue Service to subject Glencore’s past to a scrutiny which the party would never want itself subjected to. 

President Cyril Ramaphosa’s name has also cropped up because of his past ties to Glencore, and a lot of the mud has been slung from the State Capture rogues’ gallery. 

And Bantu Holomisa – a member of Parliament and head of the United Democratic Movement – wrote a letter to the Public Protector with the suggestion that perhaps South Africa should approach the US government to sniff out Glencore-related nonsense in South Africa. 

Here’s a pro tip: no one really pays too much attention to what Holomisa says these days. 

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Still, Glencore has felt the need to set the record straight, issuing a statement on Wednesday which had the following nutshell paragraph – no doubt to be a staple of any future media statements: 

“We acknowledge the misconduct identified in these investigations and have clearly stated that this type of behaviour has no place in the Glencore of today. We are committed going forward to operating transparently under a well-defined set of values, with openness and integrity at the forefront,” it said. 

And moving swiftly along – nothing to dwell on here, folks! – the statement went on: 

“Regarding the allegations relating to Optimum Coal, Glencore cooperated fully with the Public Protector investigation and Zondo Commission into State Capture. Glencore denies any allegation of wrongdoing and the conclusion of both processes confirms this.” 

In fairness to Glencore, that jives with findings to date. It also said this: 

“Mr Ramaphosa had no direct involvement in the day-to-day operations of Optimum Coal Holdings (OCH) or Optimum Coal Mine (OCM). Mr Ramaphosa divested his entire interest in OCH on 22 May 2014 prior to him taking office as the Deputy President and prior to his involvement with the Eskom War Room. 

“Mr Ramaphosa therefore had no interest in OCH following the conclusion of the Cooperation Agreement and during the period when OCM/OCH were negotiating with Eskom regarding potential amendments to the Coal Supply Agreement (CSA) with Eskom and an extension to the CSA. 

“The suggestion that Glencore involved Mr Ramaphosa in the acquisition of OCH with a view to, or with the expectation of, leveraging Mr Ramaphosa’s influence to achieve amendments to the CSA, is false and baseless.” 

This all looks like it was written by lawyers, but anyway, fair enough. 

Again, multiple investigations in a number of jurisdictions have not linked Glencore in South Africa to any of the hanky-panky elsewhere that enabled corruption in failing states with impoverished populations and is going to cost its shareholders $1.5-billion. 

Still, like it or not, South Africans are a jaded and suspicious lot, and tend to connect the dots – an exercise that can, admittedly, be unfair and baseless, but there you go. It’s almost become a national sport – a way to pass the time when the lights go out or your car gets stuck in a crater-sized pothole. 

The optics are also, it must be said, not great. 

Given the scale of the past wrongdoing that Glencore has admitted to, perhaps it would have done Ramaphosa more of a favour if it had just shut it. 

Friends like these going to bat for you are just handing your enemies a bat to donner you with. DM/BM


Comments - Please in order to comment.

  • Johan Buys says:

    one deal that deserves a closer look is whether there was a correlation between Glencore agreeing to sell Optimum to the Zuptas and a Glencore unit buying the strategic oil reserves at prices as low as $26/barrel. The deal was overturned after a public outcry.

  • makhabene89 says:

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