Glencore is being investigated for bribery by U.K. authorities, deepening the legal troubles that threaten the world’s biggest commodities trader. The shares fell as much as 8.6% to a three-year low.
The move by the Serious Fraud Office adds to ongoing corruption probes that Glencore is facing in the U.S. and Brazil, which have scared investors and shaken the company over the past two years. The SFO cast a wide net, saying it’s looking into suspicions of bribery by the company, its employees, agents and associated persons.
“This is an obvious negative for the Glencore investment case,” said Tyler Broda, an analyst at RBC Capital Markets. “We believe this clearly will hamper sentiment in what remains a complex investment case for investors.”
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The language of the U.K.’s investigation, albeit with limited detail, suggests it could be wider in scope, Broda wrote in a research note. That potentially raises the penalty, if Glencore is found guilty or reaches a settlement, he said.
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