Litigation specialist Quinn Emanuel Urquhart & Sullivan is mulling a massive shareholder group action targeting Anglo-Swiss mining group Glencore. It is understood the claim could be valued at several billion pounds.
US-headquartered Quinn Emanuel said this morning it is investigating action on behalf of shareholders following ‘public disclosure that it [Glencore] is involved in active bribery and corruption probes on both sides of the Atlantic’.
It is understood a formal claim in the High Court could be filed in the next few months provided a sufficiently large group of shareholders is on board. Shareholders include the Qatar Investment Authority and investment management corporation BlackRock.
Last week, Glencore announced that its US-incorporated subsidiary Glencore Group received a subpoena from the US Department of Justice to produce records relating to its businesses in Nigeria, the Democratic Republic of Congo (DRC) and Venezuela. Meanwhile, in May, it emerged that SFO investigators were planning to seek formal approval for a probe into Glencore’s dealings in the DRC.
According to Quinn, those allegations triggered share price declines equivalent to a £6.7bn loss in value. The claim value could potentially exceed that sum, however, depending on the number of shareholders included and whether the claim predates the announcement of formal investigations.
Richard East, co-managing partner at Quinn Emanuel’s London office, said shareholders may be entitled to bring claims in the High Court under the terms of the Financial Services and Markets Act 2000 in order to seek compensation for losses caused by Glencore’s allegedly untrue or misleading statements and/or failures to disclose relevant information to the market.
Litigation funder Innsworth is backing the claim with an undisclosed sum.
Last week Glencore announced it had formed a committee to oversee the company’s response to the DOJ’s subpoena.
Chairman Tony Hayward said: ‘Glencore takes ethics and compliance seriously throughout the group. The company will cooperate with the DOJ, while continuing to focus on our business and seeking to maximise the value we create for our diverse stakeholders in a responsible and transparent manner.’
Glencore declined to comment further today.