Two cases against Trafigura on suspicious payments

This year, Saint Nicholas once again generously distributed gifts to all the well-behaved children. The minority shareholders of Nyrstar, united under the RSQ Investors banner, secured significant international media attention yesterday regarding the controversial commodities trader Trafigura.

© Nils Mulvad

This attention follows a sustained campaign by the shareholders, who have been advocating for over four years for greater transparency concerning the 'restructuring' in 2019 of Nyrstar, the world's second largest zinc smelter. This 'restructuring', as alleged by the shareholders, involved a controversial 'cuckoo' strategy that has been called into question. This lends weight to the claims that Trafigura, with the help of a large team of professionals, managed to acquire Nyrstar in a controversial manner.

Yesterday, no fewer than three cases received special attention:

Firstly, it appears that the Swiss public prosecutor's office, which has a reputation for being very reluctant to prosecute unsavoury financial malpractices, has indicted Trafigura for a case of corruption in Angola. The sum involved is approximately €5 million USD, in exchange for which the company could realise a profit of no less than USD 144 million, according to the Financial Times (https://lnkd.in/gn35qYGS).

Additionally, it has come to light that the US is conducting an inquiry into 'improper payments' in Brazil by Trafigura. Trafigura has already set aside USD 127 million for this.

In addition, it has come to light that Gupta, an Indian businessman who was previously embroiled in legal proceedings with Trafigura, is now pursuing legal action against the company in a separate case related to a nickel fraud scheme. Allegations have been made that employees of Trafigura may have played a role in orchestrating the fraud, which is said to involve a sum of approximately 600 million USD. (see https://lnkd.in/gDMAZfeB)The company, which has been embroiled in several scandals, is still struggling to implement effective corporate governance measures.

The statement by Trafigura CEO Mr Jeremy Weir that they 'deeply regret these incidents as they breach our code of conduct and are contrary to our values' could be indicative of a broader issue. Or are there more underlying issues, and has the issue spread to the highest levels of the company? Has the corporate culture become so toxic that a general erosion of standards and the pursuit of profit is encouraging more and more employees to feel they can act with impunity and to take increasingly risky actions?

Two cases against Trafigura over suspicious paymentsOnly time will tell. This is also the case in Belgium, where people are eagerly awaiting the final report of the Financial Services and Markets Authority and its sanctions committee, and where the Antwerp public prosecutor's office launched an investigation into possible criminal offences more than a year ago.

Go to original article 'FD.nl'

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