Swiss mining giant Glencore PLC is reviewing U.S. prosecutors' allegations that one of its key business partners in the Democratic Republic of Congo bribed government officials to gain access to key resources in the impoverished Central African nation for years.
The allegations surfaced in documents released Thursday by the Justice Department and Securities Exchange Commission, which fined Och-Ziff Capital Management LLC $412 million for criminal and civil violations related to its investments in Africa. Prosecutors said Och-Ziff, in the pursuit of profit, went into business with Israeli billionaire Dan Gertler despite warnings that he used political connections in Africa to defeat competitors and win cut-rate mining deals.
In a legal filing, Och-Ziff acknowledged the DOJ's statement of facts, which says bribes were paid by its employees, are "true and accurate."
Daniel Och, the chairman and chief executive of Och-Ziff, said the events were "deeply disappointing," and called Och-Ziff's conduct "inconsistent with our core values and not representative of our hundreds of employees world-wide."
Mr. Gertler and others allegedly paid $100 million in bribes to Congo President Joseph Kabila, his senior aide, judges and law-enforcement officials, according to the SEC and Justice Department allegations.
A spokesman for Mr. Gertler and his Congolese company, Fleurette Group, said the allegations by U.S. prosecutors are "motivated by a hedge fund trying to put behind it problems sparked by people that have nothing to do with Fleurette." The spokesman said Mr. Gertler and Fleurette "vigorously contest any and all accusations of wrongdoing in any of our dealings in the DRC including those with Och-Ziff."
Mr. Gertler has been a close business partner of Glencore's since at least 2007, when the firm bought shares in Nikanor PLC, a London-listed copper operation partly owned by Mr. Gertler.
Mr. Kabila's office and the DRC embassy in London didn't respond to messages seeking comment.
"We are aware of the matter and the allegations," Glencore spokesman Charles Watenphul said Friday. "Glencore takes ethics and compliance very seriously and is considering this information‎."
Glencore has repeatedly rebutted complaints about its ties to Mr. Gertler. In a response to a 2014 report by corruption watchdog Global Witness that criticized the mining deals it completed in Congo with Mr. Gertler, Glencore said all transactions with his companies "have been conducted on arm's-length terms and all public disclosure requirements applicable to us have been complied with." All transactions with Mr. Gertler and his companies "were entirely proper," it said.
Glencore is currently partners with Mr. Gertler in two large copper-mining operations in Congo's southeast region, Mutanda Mining and Katanga Mining.
Last September, amid a plan to sell assets and pare back debt, Glencore said it planned to shut down Katanga for 18 months and spend nearly $1 billion to upgrade its operations. A landslide at one of its mines this year killed seven workers.
A due-diligence firm engaged by Och-Ziff to conduct a background check on Mr. Gertler found he "is happy to use his political influence against those with whom he is in dispute?[and] keeps what can only be described as unsavory business associates," according to the Justice Department.
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