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By Kit Chellel
(Bloomberg) — Glencore Plc was ordered to pay just over $40 million to OMV Petrom SA by a U.K. court for fraudulently shipping oil of a lower-than-purported quality to Romania in the 1990s.
Marc Rich & Co., later to become Glencore International AG, sold about 32 shipments to Romanian state firms from 1993 to 1996 made up of cheaper crude blends than agreed, and falsified documents, Julian Flaux, the judge in the London court, said in his ruling on Friday. It profited by about $40.1 million from the “deceit,” he said.
Glencore will appeal 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 trader said in a statement.
Glencore supplied about a quarter of the crude imported by Petrol Export Import SA, or Petex, on behalf of two state firms that later became Petrom, Flaux said. Ramona Zanfirescu, a spokeswoman for Petrom, which was privatized in 2004, didn’t immediately respond to an e-mail seeking comment.
The fraud was revealed by a Glencore whistle-blower who contacted Petex in 2002 and told the company “the 32 cargoes were not what they purported to be,” Flaux said.
He rejected Glencore’s argument that Petex was aware of the wrongdoing and said two former Marc Rich traders who testified at the trial were “duplicitous witnesses, anxious to downplay their own involvement in the fraud.”
The dispute has been the subject of two arbitration proceedings going back more than a decade. Petrom filed its U.K. lawsuit against Glencore in 2008.
The case is: SC Petrom SA v. Glencore U.K. Ltd. & 3 Ors, High Court of Justice, Queen’s Bench Division, 08-417
Copyright 2015 Bloomberg.
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