Glencore chiefs failed to reveal £4m payouts

STAFF at a controversial mining company failed to disclose more than £4m in payments handed to them by parent company Glencore.

Finance chief Jacques Lubbe, former chief executive Jeff Best and nine other members of the top team at Katanga Mining shared bumper share bonuses from Glencore between 2011 and 2016.

But the payments were not published as they should have been.

Lubbe, and three other board members who had not received undisclosed payments, resigned yesterday as Canada-listed Katanga was rocked by revelations of major accounting problems. It is also being investigated by financial authorities.

Billionaire Telis Mistakidis, head of Glencore’s copper division, and fellow board members Liam Gallagher and Tim Henderson stepped down after Katanga found it had overstated copper stock by more than 7,916 tons.

Canadian authorities are investigating whether Katanga filed misleading financial statements and are also probing corporate governance, directors’ behaviour, and disclosure of risk under bribery laws.

It is the latest scandal to beset Glencore. Last week there were calls for UK authorities to investigate £34m loaned by Glencore to Israeli billionaire Dan Gertler, who helped negotiate mining rights for Katanga.

The Wall Street Journal reported in July that the Ontario Securities Commission is already looking into £75m in payments from Katanga to Gertler’s company. Katanga says its major copper and cobalt mines in the Democratic Republic of the Congo, one of the world’s poorest and most corrupt countries, have the potential to become the world’s largest producers of cobalt. Demand for cobalt is set to soar due to its use in electric cars.

Glencore yesterday nominated Steven Kalmin, currently Glencore’s chief finance officer, as well as other Glencore bosses Mike Ciricillo and Tony Moser, to Katanga’s board to improve financial controls.

Katanga started investigating itself earlier this year amid the Canadian authorities’ probe. The results of its review published yesterday revealed accounting practices that incorrectly recorded total copper cathode production, the value of copper concentrate and ore, and amounts of property plant and equipment. The newly disclosed extra pay involved a potential £600,000 worth of shares to Johnny Blizzard, chief executive of Katanga since February 2015, including £377,000 in 2014.

His predecessor Best had around £1.2m in undisclosed share payments. Lubbe was awarded £180,000 in a long-term incentive plan in 2014.

Katanga said the payments should have been disclosed.