US Demands Documents from Glencore Over Alleged Corruption Allegations in Nigeria

• Two ex-Afren executives convicted over Nigerian deals

The US Department of Justice is seeking documents from Glencore
about intermediary companies that the commodities firm has worked
with in Nigeria, the Democratic Republic of Congo, and
Venezuela.

This is coming as two former executives of collapsed oil firm,
Afren Plc, were wednesday convicted of fraud and money laundering
offences relating to a $300 million business deal in Nigeria,
according to a statement by the UK’s Serious Fraud Office
(SFO).

The Swiss-based Glencore, a major exporter of Nigerian and
Venezuelan crude oil, was among the 50 local and international oil
traders that won NNPC’s crude oil lifting contracts that would run
from July 1, 2018 to June 2020.

Each of the 50 companies would lift 950,000 barrels of crude oil
in the two-year contracts.

Glencore said on July 3 it had been subpoenaed for documents
relating to its business in Nigeria and the other two countries,
sending its shares down 13 per cent and leaving investors to guess
about the direction of the investigation.

The Switzerland-based firm had said the subpoena related to
compliance with the United States Foreign Corrupt Practices Act and
money-laundering statutes but did not indicate the Department of
Justice was focused on intermediaries or give further details.

The US Foreign Corrupt Practices Act makes it a crime for
companies to bribe overseas officials to win business.

Glencore, which said on July 11 that it would cooperate with the
US authorities after receiving the subpoena, declined to offer
additional comment for this article. The Department of Justice
declined to comment.

A source, who was familiar with the Nigerian element of the
probe, told Reuters that the Department of Justice wanted Glencore
to hand over documents related to associates of former Nigerian oil
minister, Mrs. Diezani Alison-Madueke.

The US authorities are investigating alleged bribery of the
former minister and alleged money-laundering by her associates.

An unnamed lawyer for Alison-Madueke requested Reuters to send
questions by email, but did not respond when that email was
sent.

The Nigerian government also referred requests for comment to
the Attorney General of the Federation and Minister of Justice but
he did not respond to requests for comment.

In a related development, two former executives of collapsed oil
firm Afren were yesterday convicted of fraud and money laundering
offences relating to a $300 million business deal in Nigeria, the
UK’s Serious Fraud Office (SFO) has said.

According to UK’s SFO, former Afren Plc, Chief Executive, Osman
Shahenshah and former Chief Operating Officer, Shahid Ullah
received more than $17 million and laundered $45 million, some of
which was used to buy luxury properties in Mustique and the British
Virgin Islands,

Shahenshah and Ullah created shell companies and agreed a side
deal with one of Afren’s Nigerian oil partners from which they
would benefit, without the knowledge of Afren’s board, the SFO
added.

“Instead of acting in their company’s best interests, they used
Afren like a personal bank account to fund an illicit deal, with no
regard for the consequences,” Director of the SFO, Lisa Osofsky,
said in a statement.

The men, who did not enter a plea, were found not guilty at
Southwark Crown Court on a separate charge relating to a management
buyout of another of Afren’s business partners.

Shahenshah’s solicitor did not immediately respond to a request
for comment, while Ullah did not immediately respond to a request
for comment via LinkedIn.

The criminal investigation began in June 2015 following a
self-report by Afren, while the defendants were charged with four
offences in September last year.

Afren sacked Shahenshah and Ullah after an independent review in
2014 found evidence of “gross misconduct.”.

The company’s shares lost nearly all of their value after being
hit by a slump in oil prices, the dismissal of the executives and
the absence of proven or probable reserves at an oilfield in the
Iraqi Kurdistan Region.

Afren went into administration in July 2015 after failing to
secure support for a refinancing and restructuring plan.