Any company that goes public through an initial public offering is opening itself up to considerably more scrutiny than it received when it was closely held. Glencore International PLC is a case in point: Since the Swiss-based commodities trader went public last May, it has found itself at the centre of a year-long investigative report by (via ), which focuses on Glencore’s exploits in some of the more lawless corners of the world, using questionable contacts.
From the FP article: “The firm was forced to pull back the curtain on its famously secretive doings to go public, and what it revealed shocked even seasoned commodities traders.”
Here’s an excerpt that FT Alphaville highlighted: “This means operating in countries where many multinationals fear to tread; building walls made of shell corporations, complex partnerships, and offshore accounts to obscure transactions; and working with shady intermediaries who help the company gain access to resources and curry favor with the corrupt, resource-rich regimes that have made Glencore so fabulously wealthy. ‘We conduct whatever due diligence is appropriate in each situation to ensure we operate in line with Glencore Corporate Practice,’ said spokesman Simon Buerk, when asked how the firm chooses business partners and local representatives.”
Perhaps this doesn’t come as a huge surprise to anyone who had previously viewed with suspicion some of Glencore’s far-flung operations. But the article arrives as Canadian investors deal with the fallout from another company whose international ties are now haunting it.
SNC-Lavalin Group Inc. has slumped 30 per cent since early February, when it disclosed an investigation into improper payments, stemming from contracts in Libya. Since then, the company has endured the resignation of its chief executive and police raids on its Canadian offices.
At least Glencore, which has complex ties to Congo and Russia, has recently begun to explore far more stable environs: It recently agreed to a $6.1-billion takeover of Viterra Inc. , the Regina-based grain handler.
Glencore could certainly use a lift. Since the shares debuted last year, they've fallen more than 20 per cent in London.