LostMessiah – The Gertler, Fleurette, Katumba, Glencore…. Reported Long Ago
To our faithful readers and to the journalists and law enforcement who read our pages:
We uncovered the abuses portrayed long ago. For a look into our investigations into Dan Gertler, Fleurette, the death of Katumba, Glencore, the various violations and other unsavory practices, please go into our search bar and search the names. We reported about these issues nearly 2 years ago.
Regulator expected to allege Katanga Mining hid risks of doing business with Israeli diamond merchant closely linked to Congolese President Joseph Kabila
A Glencore GLNCY -3.44% PLC-controlled mining company and some of its current and former directors and executives have agreed to pay more than $22 million to settle Canadian allegations that they hid the risks of doing business with a controversial Israeli businessman closely linked to Congolese President Joseph Kabila, according to a person familiar with the matter.
The expected settlement between the Ontario Securities Commission, Canada’s biggest stock-market regulator, and Toronto-listed Katanga Mining Ltd. KAT -1.56% is related to the company’s business activities in Congo between 2014 and 2016, the person said.
The regulator is expected to name several of Katanga’s current and former executives and directors in the settlement and will focus, at least in part, on Katanga’s longstanding ties with Dan Gertler, the Israeli businessman who first invested in Katanga alongside Glencore in 2008, the person said.
The OSC is also expected to allege that Katanga lacked proper internal financial controls, leading it to overstate copper production and understate mining costs, potentially inflating the miner’s performance, according to the person familiar with the matter.
Glencore owns about 86% of Katanga. In 2017, Glencore purchased Mr. Gertler’s stakes in Katanga and another giant copper mine in Congo.
The settlement is expected to name Glencore’s former representatives on Katanga’s board, according to this person. Those individuals include Aristotelis Mistakidis, one of Glencore’s most senior executives and two other Glencore executives, Liam Gallagher and Tim Henderson. All three stepped down from the board in November 2017 after Glencore and Katanga confirmed the Canadian investigation. The probe was first reported by The Wall Street Journal.
Katanga and the named individuals have agreed to jointly pay a fine of more than 30 million Canadian dollars ($22 million) to settle the allegations, according to the person.
The people named in the OSC settlement will be banned for certain periods of time from acting as a director or officer of a publicly traded company listed in Ontario, the person said.
The settlement is expected to be announced as early as this week. A panel of the OSC must approve any settlement agreement at a public hearing for it to take effect.
It’s unclear whether Katanga and the individuals admit to wrongdoing in the settlement.
Katanga Chief Executive Johnny Blizzard has also agreed to resign as part of the settlement, the person said.
- Probe Into Glencore Copper Business Nears Settlement (Dec. 3)
- U.S. Probes Ties Between Glencore, Diamond Merchant Under Sanction (July 5)
- Glencore Shares Tumble After U.S. Subpoena (July 3)
- Glencore Upends Board of Congo Unit Amid Probe (Nov. 20, 2017)
- Glencore Under Probe Over Congo Payments (July 27, 2017)
Katanga’s settlement represents another reputational hit for Glencore and its operations in Africa. In July, the London-listed mining giant said it had received a subpoena from the U.S. Justice Department demanding records related to its compliance with American antibribery and money-laundering laws in Congo, Nigeria and Venezuela.
The Wall Street Journal reported that a focus of the probe is Glencore’s ties to Mr. Gertler.
Mr. Gertler in recent years has become a lightning rod for controversy. In 2016, he was a central figure in a $412 million settlement between the U.S. Justice Department and the Securities and Exchange Commission with New York hedge fund Och-Ziff Capital Management Group LLC. A businessman people familiar with the matter said is Mr. Gertler paid more than $100 million in bribes to Congolese government officials, including Mr. Kabila, to get beneficial terms for deals in the Central African country, the DOJ and SEC alleged.
A spokesman for Fleurette Group, Mr. Gertler’s main company in Congo, said it “has always acted appropriately and with integrity in the DRC. Nothing has ever been proven against the company or its executives in a court of law.”
A year ago the U.S. Treasury Department sanctioned Mr. Gertler, alleging he traded on a friendship with Mr. Kabila to amass a fortune through “opaque and corrupt” deals on behalf of multinational companies seeking to do business in Congo. Mr. Gertler has denied wrongdoing and has declined to comment on the Treasury allegations and Justice Department investigation.
The OSC is expected to allege that Katanga breached Canadian securities law by not disclosing the risks it faced by relying on Mr. Gertler to maintain relationships with Mr. Kabila, Congo’s president, according to the person familiar with the matter.