Company News

Canadian regulator to consider Katanga settlement proposal Tuesday

LONDON, Dec 17 (Reuters) - A Canadian regulator will consider on Tuesday whether to accept a proposal from Katanga Mining Limited to settle allegations related to the Glencore-controlled company’s activities in Democratic Republic of Congo.

Katanga said in a statement on Monday it could not give details of the proposal until after the hearing, at which the Ontario Securities Commission (OSC) will consider whether a global settlement with Canadian-listed Katanga is in the public interest.

Glencore declined to comment.

The hearing follows a Wall Street Journal report that Katanga and some of its current and former executives had agreed to pay more than $22 million to settle Canadian allegations they hid the risks of doing business with an Israeli close to Congolese President Joseph Kabila.

A statement from Katanga in 2017 said the OSC was reviewing whether the company’s previously filed financial statements “contain statements that are misleading in a material respect”.

Katanga had said the OSC was also investigating whether the company’s corporate governance practices were adequate and the “related conduct” of certain unidentified company directors and officers.

Glencore has faced a series of legal problems related to its activities in Congo, which is home to almost 60 percent of the world’s supply of cobalt, a mineral expected to be in demand for batteries used in electric vehicles.

Last year, after an internal review into Katanga identified weaknesses in its financial reporting controls, three Glencore executives, including Aristotelis Mistakidis, the head of its copper group, stepped down from the board of Katanga.

Mistakidis, one of Glencore’s most senior executives, retires at the end of the year, Glencore announced earlier this month.

In an emailed statement, Moody’s credit agency said the OSC case had no bearing on Glencore’s credit rating and the expected settlement was equivalent to around one day of free cash flow generation from the Glencore group. (Reporting by Barbara Lewis; Editing by Mark Potter)