Ivanhoe Mines indexed in “The Sentry” report for receiving illegal benefits from insider trading
A new investigative report published this Thursday, December 15 by The Sentry entitled “Hijacking the system: How a Canadian mining giant played the law in the DRC” indexes Ivanhoe Mines. This organization alleges that Ivanhoe received illegal insider trading advantages; and that in a separate case, Canadian police are looking for evidence of corruption.
The investigation focuses on Ivanhoe’s control of a potentially very rich deposit in the Central African copper belt. Information reviewed by The Sentry reveals that the multibillion-dollar company, led by American-born founder Robert Friedland, arranged to sell potentially lucrative shares of local subsidiaries to a politically connected person , at a time when the Congolese government was taking apparently illegal measures allowing Ivanhoe to maintain certain exploration permits. According to analysis by The Sentry, these permits should have been returned by Ivanhoe several years ago.
This report also highlights a previously unreported detail in Ivanhoe’s 2021 annual report, revealing that Canadian police executed a search warrant of the company’s headquarters, citing reasonable grounds to believe that in Congo Ivanhoe had violated Canada’s foreign bribery law between 2014 and 2018.
“The people of the DRC deserve a government that puts the fight against poverty before the interests of the insiders and the powerful. However, in this specific case, the information we have suggests that, with considerable sums at stake, the law did not appear to apply to a leading operator with high-level connections. At a minimum, the facts set forth in this report warrant thorough investigations into Ivanhoe’s conduct by the appropriate authorities in multiple jurisdictions. “, argues Douglas Gillison, senior investigator at The Sentry.
For Floribert Anzuluni, Senior Policy Advisor at The Sentry, “Ivanhoe Mines and the capital the company attracts in international markets are not entitled to any share of the DRC’s mining wealth beyond the limits set by Congolese law. This report exposes the type of suspicious, even illegal, arrangements that have long plagued the DRC’s natural resources sector. Through stronger and more transparent enforcement of the law and more rigorous scrutiny of corporate conduct, foreign investors will learn that the path to success is not to break DRC rules, but to obey them. »
Recall that recent media reports indicate that the kind of arrangement suggested by the facts set out by The Sentry in this report, “Hijacking the System,” may not have ended with the Kabila era. Hidden camera videos released in September this year apparently show Vidiye Tshimanga, then a close adviser to DRC President Felix Tshisekedi, claiming to own 20% of an unidentified joint venture with Ivanhoe Mines and telling unidentified people that he believed to be potential investors that they could pay him using secret business arrangements and funnel payments to political parties by awarding contracts to well-connected service providers, all with the approval of the president.
Mr Tshimanga, who has denied any wrongdoing, later resigned and faces prosecution, saying he was set up by malicious actors operating under false pretenses, and the presidency said any adviser found guilty breach of legal or ethical obligations would be held liable. Neither Mr. Tshimanga nor a lawyer representing him responded to questions from The Sentry.
In response to The Sentry’s request for comment on the report’s findings, Ivanhoe Mines said its operations are subject to strict anti-corruption policies and internal controls and that any inference of corruption or wrongdoing is “simply incorrect.” “. The company declined to provide detailed answers to most of the questions posed by The Sentry, but said they related to common processes and procedures for companies operating across international borders for extended periods of time, adding: “there there are legal, commercially reasonable, and conventional explanations for these matters.”
Ivanhoe Mines told The Sentry it is cooperating with Canadian authorities and that documents seized by police last year are currently being reviewed to identify documents protected by legal privilege. The company also said that at this stage it has not set aside any funds in anticipation of a monetary penalty and has no further comment on the matter.
The Congolese government should, according to The Sentry, investigate the findings presented in this report and, if necessary, prosecute if Congolese criminal laws or regulations have been violated. Equally, the Canadian and U.S. governments should review the findings presented in this report, investigators suggest, and open investigations into any potential violations of securities laws and criminal laws.
The Sentry is an investigative organization that tracks down multinational predatory networks profiting from violent conflict, repression and kleptocratic systems.
