Key Points
- Trafigura is charged with bribery related to Angolan contracts.
- Fraud and overdue debts lead to $1.1 billion loss in Mongolia.
- Company defends itself citing past compliance measures and reviews.
Powerhouse Trafigura Group, which deals in commodities and oil, and three other defendants were put on trial for alleged bribery in Switzerland’s highest criminal court on Monday.
Trafigura stands trial over bribery allegations in Switzerland.
Trafigura is accused of not taking appropriate action to stop the payment of over $5 million in bribes to an Angolan oil official in return for contracts related to shipping and oil more than ten years ago.
Trafigura announced in a statement that Trafigura Beheer BV (TBBV), its former parent firm, will defend itself. The company stated that it has since reinforced its compliance measures. “TBBV’s anti-bribery and anti-corruption controls and compliance program in place at the relevant time have been externally reviewed and assessed to have met legal requirements and international good practice standards applicable at that time,” the company said.
Bloomberg stated in an article from last month, Trafigura could lose up to $1.1 billion in Mongolia as a result of suspected employee misconduct. According to the investigation, the company’s employees concealed past-due debts and manipulated payments, a practice that went unnoticed for years.Â
Oil trading giant faces massive financial losses in Mongolia.
Speaking in private, nine bankers called the possible loss “astounding,” given that Mongolia consumes around 35,000 barrels of oil each day, which is worth approximately $1 billion a year—less than 0.3% of Trafigura’s total oil trading value.
The company’s ability to learn from its mistakes swiftly and effectively is the essential question, according to consultant and former commodity banker Jean-Francois Lambert. “Not merely by reshuffling or dismissing staff and launching a lengthy recovery process, but by strengthening the company’s governance, internal processes, and controls,” he stated.
According to Oilprice, one of the biggest and most varied commodities traders in the world today is Trafigura. In addition to selling more than 100 million tonnes of metals and bulk commodities, including coal, the corporation handled an average of 5.5 million barrels of oil per day last year, which is equal to the combined oil demand of the UK, France, and Germany. With $244 billion in total sales for FY 2023, Trafigura outperformed British oil giant BP Plc. (NYSE: BP).
