'Concerned' EIB freezes all Glencore loans
The European Investment Bank has frozen all new lending to Glencore and its subsidiaries, citing 'serious concerns about governance', writes Rob Davies.
Complaint response: EIB says it will decline any further loan requests from Glencore
The shock sanction was buried deep within an EIB response to accusations made last week by campaign groups Counter Balance and Eurodad, in a letter signed by more than 50 MEPs.
Their complaint accused Glencore subsidiary Mopani Copper Mines of causing widespread pollution and avoiding tax in Zambia. The firm vehemently denies the later allegation.
They questioned the wisdom of a £42m loan made by the EIB to Mopani in 2005, calling on the European Union's lending institution to cease any further funding of mining companies.
The EIB issued a stern rebuttal of the points raised, but added in a paragraph hidden at the bottom of its response that it has suspended all further loans to Glencore.
It said: 'Due to serious concerns about Glencore's governance which have been brought to light recently and which go far beyond the Mopani investment, the president of the EiB has instructed the services to decline any further financing request from this company or one of its subsidiaries.'
Neither the EIB nor its president Philippe Maystadt were prepared to make any further comment but EIB officials are understood to be alarmed by the steady trickle of concerns about Glencore's governance record. The firm said it was 'seeking clarification' on the EIB's statement.
The blacklisting by the EIB comes amid anxiety among investors over a float that saw Glencore (up 7.4p to 531p) avoid any criticism from banks by hiring almost all of them to manage the process.
Standard Life publicly vented its anger at the appointment of Simon Murray as chairman amid widespread suggestions that former BP boss Lord Browne had been in line for the job.
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