Glencore fell the most in the last two years as its troubles in Africa escalated in a big way after authorities in the U.S. demanded documents that related to possible money laundering and corruption.
The largest commodity trader in the world said on Tuesday that it was subpoenaed by the U.S. Justice Department ordering that documents that related to the Foreign Corrupt Practices Act and money laundering statutes be handed over.
The documents involve the businesses the company has in the Democratic Republic of Congo, Nigeria, and Venezuela dating back to 2007. Shares plunged by up to 13% on the news.
The year has been a tumultuous one for Glencore due for the most part to challenges that are linked to its Congo-based business, where it has giant cobalt and copper mines. The Swiss miner and trader already faces the possibility of an investigation involving bribery by prosecutors in the UK over work with Israeli billionaire Dan Gertler who is a good friend of Joseph Kabila the President of Congo, said people close to the situation last May.
Glencore said it was reviewing its subpoena and would provide more information when appropriate. The stock dropped to its lowest in close to a year and was off by 12% in London mid-morning trading.
The announcement knocked more than $7.3 billion of the market value of Glencore, equal to about half the profit of $14.8 billion it made in 2017.
The Justice Department usually gives subpoenas when it investigates a company.
In December, a court in Switzerland ordered companies that Gertler controlled to hand bank documents over to federal prosecutors in the U.S.
The biggest penalty in the U.S. for foreign corruption was a payment that totaled $965 million imposed upon Telia Company AB a Swedish telecoms company, after it had admitted it paid hundreds of millions of bribes to an Uzbekistan government official.
While Glencore did not specify what the Justice Department is investigating, legal challenges have plagued it in Nigeria, Venezuela and the DRC which suggests where the authorities in the U.S. are focused.
The relationship the company has with Gertler, who is under sanctions by the U.S. over alleged corrupt deals in the Congo, has been of concern for a long period.
In Venezuela, the company is amongst oil traders that have been accused of paying bribes so they can have an inside track on the different oil deals.