Glencore Ordered to Pay Millions Over Decades-Old Oil Fraud

By Kit Chellel

(Bloomberg) — Glencore Plc was ordered to pay simply over $40 million to OMV Petrom SA by a U.Ok. courtroom for fraudulently transport oil of a lower-than-purported high quality to Romania within the Nineties.

Marc Rich & Co., later to turn into Glencore International AG, bought about 32 shipments to Romanian state corporations from 1993 to 1996 made up of cheaper crude blends than agreed, and falsified paperwork, Julian Flaux, the decide within the London courtroom, stated in his ruling on Friday. It profited by about $40.1 million from the “deceit,” he stated.

Glencore will attraction the ruling.

“The events took place over 20 years ago and the relevant commercial staff have long since left the company,” the Baar, Switzerland-based commodities dealer stated in an announcement.

Glencore provided a few quarter of the crude imported by Petrol Export Import SA, or Petex, on behalf of two state corporations that later turned Petrom, Flaux stated. Ramona Zanfirescu, a spokeswoman for Petrom, which was privatized in 2004, didn’t instantly reply to an e-mail looking for remark.

The fraud was revealed by a Glencore whistle-blower who contacted Petex in 2002 and advised the corporate “the 32 cargoes were not what they purported to be,” Flaux stated.

He rejected Glencore’s argument that Petex was conscious of the wrongdoing and stated two former Marc Rich merchants who testified on the trial had been “duplicitous witnesses, anxious to downplay their own involvement in the fraud.”

The dispute has been the topic of two arbitration proceedings going again greater than a decade. Petrom filed its U.Ok. lawsuit in opposition to Glencore in 2008.

The case is: SC Petrom SA v. Glencore U.Ok. Ltd. & 3 Ors, High Court of Justice, Queen’s Bench Division, 08-417