Tens of millions of dollars that London-listed commodities trading and mining giant Glencore paid the Democratic Republic of Congo (DRC)'s state-owned mining company went to a business controlled by Israeli billionaire Dan Gertler, according to an non-governmental organisation specialising in the fight against corruption.
British advocacy group Global Witness alleged that between 2013 and 2016, Glencore, which has stakes in the DRC, paid a total of more than $75m (£61.4m) in royalties and signing bonuses to a company belonging Gertler.
This money was originally intended for Gécamines, the national mining company of the Congo, the NGO said.
Glencore-controlled Kamoto Copper Co (KCC) told the Extractive Industries Transparency Initiative (EITI) in 2013 and 2014, in publicly available disclosures, that the payments were made to Gécamines, the state company.
EITI audits payments made by mining companies to governments annually. Companies sign up to the initiative voluntarily.
However, Glencore later admitted in a letter sent to Global Witness on 16 February that since 2013 a series of royalties had been redirected to the company Africa Horizons Investment Ltd (AHIL), a wholly owned subsidiary of Gertler's Fleurette Group, rather than Gécamines . The Reuters news agency was also sent a statement outlining the above.
Glencore does not deny the existence of these payments, and said Gécamines had instructed it to do so under an agreement signed between the three parties in which the public company would have ceded its rights. The mining giant said that the payments to AHIL "discharged KCC's obligation to make these payments to Gécamines".
Glencore said KCC made the payments to AHIL "in accordance with the payment instruction from Gécamines and the subsequent tri-partite royalties agreement between KCC, Gecamines and AHIL."
Global Witness, meanwhile, questioned the argument and said it was not enough to rule out the risk of corruption because the multi-party agreement dated from 2015, not 2013, and would thus only cover part of the $75m payments.
The NGO said it was surprised that Glencore's shareholders had not been informed of this change. "Why is the name of Dan Gertler not on the financial documents available?" asks Peter Jones, campaigner for the DRC. A question all the more important in his eyes because the Israeli businessman close to the Congolese head of state is pinned in several cases of corruption.
Last month, Glencore announced it agreed to a $960m deal to acquire stakes in two Congolese cobalt and copper mines owned by its business partner Gertler.
Under the deal, Glencore is set to control 100% of the Mutanda cobalt mine, and 86% of the copper mine in Katanga. But the deal will also distance the mining giant from the Israeli billionaire, who became a partner a decade ago when the two entities both invested in DRC-focused mining company Nikanor PLC, which later merged with Katanga Mining Ltd.
A magnet for controversy, Gertler began operating as a diamond merchant in the DRC in the late 1990s. Most recently, the United Kingdom Serious Fraud Office said it was investigating Gertler over mining deals in the DRC.