Glencore’s billionaire head of copper trading, Aristotelis Mistakidis, was among executives fined and banned from being a director by Canada after admitting that its Congolese copper and cobalt unit misstated how much metal it mined.
Mistakidis, who is retiring from Glencore at the end of this year, was hit with a C$2.45m (R26m) fine and a four-year director ban in Ontario at a public hearing on Tuesday by Canada’s Ontario Securities Commission. Other Katanga Mining directors including Liam Gallagher and its chief executive officer, Johnny Blizzard, were also sanctioned.
The punishment from the OSC is a response to false accounting from Katanga that saw it overstate how much it mined in the Democratic Republic of Congo in 2014. Glencore, which has come under intense pressure following a string of investigations into its dealings in Congo, owns 86% of Katanga.
The OSC previously said that Katanga overstated its copper production by about 8 000 tons in 2014 after the Glencore directors on its board "participated in instructing management" to report output at a certain level. It also said the company had failed to disclose the risks posed by its reliance on its partner in Congo, Israeli billionaire Dan Gertler, who was placed under U.S. sanctions last year.
Glencore is set to have a greater involvement in Katanga, which said in a statement Tuesday that it plans to enter into a management agreement with the Swiss company early next year. That will allow operations to be managed more effectively, Katanga said.
Blizzard: C$400 000 penalty and two-year ban with minor exceptions, with the CEO also to resign within 30 days.
Katanga’s former Chief Financial Officer Jacques Lubbe: C$550 000 penalty and four-year ban.
Jeffrey Best: C$750 000 penalty and four-year ban. Katanga has paid a penalty of C$28.5m and costs of C$1.5m.
Katanga’s shares declined 5.3% in Toronto, while Glencore was down 1.1% in London.