Rich escaped Nazi Germany as a child and began his career in commodities trading with a friend, Pincus Green, in the 1970s. Their game: trade with countries in political turmoil.
Bloomberg reported in 2009 that one of the company’s early tricks was to fly oil barons to a chalet in the south of France which was stocked with Parisian prostitutes and entertain them there for a week. Their hospitality model worked. They got the contracts they were after.
In 1974, Rich started up Marc Rich Trading & Co, which would quickly become one of the most powerful commodities trading companies in the world. And Rich, it seems, would stop at nothing to hold that spot. He admitted in interviews for the 2009 book, The King of Oil by journalist Daniel Ammann, that he supplied oil to South Africa during apartheid and that he worked for Mossad, the Israeli intelligence agency.
In 1983 the American authorities charged him with tax evasion and selling oil to Iran during the hostage crisis between 1979 and 1981. He fled to Switzerland, where he lives. In 1994 Rich sold his shares in the company to German businessman Willy Strothotte, under whom the firm became Glencore.
Rich and elusive: The man who started it all, Marc Rich, with his wife Denise in Davos, Switzerland, in 1985. (Reuters)
But it was former US president Bill Clinton’s surprise move on his last day in office in January 2001 that stunned many. He pardoned Rich on condition that he pay all his outstanding taxes, which ran into $48-million. Rich never returned to the US and has never paid the taxes.
Why Clinton pardoned him has led to much speculation. Many put it down to political pressure from Israeli bigwigs at a time when Clinton was working hard to conclude a peace deal between Palestine and Israel.
Later that year, the State of New York sued Rich for $137-million that they claimed he owed them.
In the same year, the United Nations Security Council reported that Glencore had bought a million barrels of Iraqi crude and sold it to Croatia at a $3-million premium. Glencore was made to pay the profit over to the UN.
Ten years later, under chief executive Ivan Glasenberg, who took up his position in 2002, the controversies have merely changed appearance. Reuters reported that in 2009 the company’s coal operation in Colombia, Prodeco, was fined $700 000 for environmental violations, including waste disposal without a permit. Earlier this year, the company’s chairperson, Simon Murray, came under fire for sexist remarks about female employees.
“Women … are not so ambitious in business as men because they’ve got better things to do,” he said in an interview with Britain’s Sunday Telegraph. “Do you think that means when I rush out what I’m absolutely desperate to have is young women who are about to get married in my company, and that I really need them on board because I know they’re going to get pregnant and they’re going to go off for nine months?”
Murray apologised for his comments and said that he was “100% committed to equal opportunities in the boardroom”. Last month, the Mail & Guardian reported that a coalition of international non-profit organisations had accused Glencore of cheating the Zambian government out of $100-million in taxes by dramatically raising their operational costs at its subsidiary, Mopani Copper Mining, in Kitwe. The accusations were based on a leaked audit report which Glencore’s board had rejected based on what they said was “incomplete information”.
The company has also been singled out for its poor environmental record. Its prospectus details several environmental mishaps, including effluent spillage, sulphurous gas emissions and acid leakage into the water supplies of parts of Zambia and the Democratic Republic of Congo, where it has operations.
Glencore recently appointed Tony Hayward, chief executive of BP at the time of the Gulf oil spill last year, to its environment, health and safety committee.
New kids on the super-rich block
Among the old boys on Glencore’s cash-flush board of directors, three — including the billionaire chief executive — are South African.
Ivan Glasenberg, Glencore’s chief executive, has a reputation for being extremely private and media shy, rarely granting interviews. But with the company going public he can no longer hide that, holding 18% of the company at an estimated value of $9-billion, he is now the wealthiest South African. He beats tobacco mogul Johann Rupert and mining heir Nicky Oppenheimer by billions. He is also in the top 100 wealthiest people in the world and is now only the fifth South African to be named on the Forbes annual billionaires list.
The 54-year-old is on the boards of Xstrata, in which Glencore has a 34% share, and Minara Resources. He is a chartered accountant with an accounting degree from the University of the Witwatersrand and an MBA from the University of Southern California. In 1984 he joined Glencore’s coal department in Johannesburg.
He then managed the Hong Kong and Beijing offices and was named CEO in 2002. According to Moneyweb, Glasenberg, who lives in Baar, Switzerland, is still very much South African. He grew up in Melrose, Johannesburg, which he visits regularly, and he speaks with a local accent. His wife is from Germiston. He has a son and a daughter and dual South African and Israeli citizenship.
He is a champion race-walker for both South Africa and Israel and would have gone to the 1984 Olympics had it not been for Israeli citizenship issues. He is still an avid sportsman and runs or swims daily. He is known by colleagues for his charm — and fiery temper.
At just 37 years old, finance superman Steven Blumgart has done well for himself. With a commerce degree from the University of the Witwatersrand, he began his work life in auditing in Johannesburg. He then became a chartered accountant and got a job with what is now Grant Thornton. Blumgart joined Glencore in 1998, working his way through the industrial coal business. Eight years later he became the co-director of the company’s alumina and aluminium department. He is an expert in all things aluminium, from refining to marketing. He is on the board of many international aluminium companies, including Century Aluminium, UC Alumina Jamaica and OAO Rusal.
His worth is not disclosed in the prospectus, which means his stake will be under 3%. But experts and journalists globally are still classifying him as another likely billionaire. He is also based in Baar and has dual Swiss and South African citizenship.
Fifty-one-year-old Stuart Cutler is described by rivals as “affable”. He too studied at the University of the Witwatersrand, where he received a BProc degree. Cutler became a partner at South African law firm Werksmans. He has also been admitted as an attorney in New Zealand.
Cutler joined Glencore in 1995 and worked on base metals and ferroalloys in the Johannesburg office. In 1999 he moved into nickel and in 2005 became the co-director of ferroalloys, nickel and cobalt and he oversees the marketing, strategy and operations of the department. Also based in Baar, Cutler loves running. His shares are also undisclosed by the company, but he will easily make it onto the list of new multimillionaires.