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Glencore facing US$1.14B lawsuit over stake in DRC cobalt mine

Congolese-American businessman Charles Brown is seeking US$1.14 billion in compensation from Glencore PLC in a fresh legal challenge besetting the commodities trader, Bloomberg News reported June 8.

Brown, a convicted fraudster, aims to take back a 19% stake in Mutanda Mining SARL, now a Glencore unit, that he co-founded, after he claimed his shares were fraudulently sold in two transactions to Glencore in 2007 and 2012, according to the report. Mutanda Mining operates the Mutanda copper-cobalt mine in the country.

A High Court in Kinshasa in March ordered Glencore CEO Ivan Glasenberg, copper trading business head Aristotelis Mistakidis and former Mutanda shareholder Alex Hayssam Hamze to appear at a public hearing July 2 to address accusations of using "violence and threats" to compel Brown to relinquish his claim in May 2012.

The report said the summons followed a January ruling at the Commercial Court in Kolwezi, which allowed Brown to seize US$843 million in Glencore and Mutanda assets. An appeal by Mutanda was denied in March.

A Glencore statement in the Bloomberg News report dismissed Brown's allegations as "vexatious and baseless." In 2013, Brown was sentenced to four years in jail, subsequently reduced to six months, for attempted fraud after charges were brought by Hamze.

The latest lawsuit follows separate legal challenges in April from Gécamines SA and Ventora Development SASU, a company affiliated with Israeli billionaire Dan Gertler.

Gécamines began legal proceedings to dissolve Kamoto Copper Co. SARL following the joint venture's failure to address a previously disclosed capital deficiency. The DRC state miner accused parent Glencore of "draining" money from the Kamoto joint venture.

Ventora served freezing orders against Mutanda and Kamoto, accusing both companies of failing to make required royalty payments. The Glencore subsidiaries contended they did not have to pay the Gertler-affiliated company the royalties due to Gertler's classifications as a specially designated national by the U.S. government in late 2017.