It is certainly the biggest and perhaps the most controversial flotation in the history of the London Stock Exchange, and it might just have produced the fattest document ever submitted for investors' perusal: a digest of a global business and all its risks which runs to 1,637 pages.
But when the oil, metals and food trading giant Glencore joins the ranks of public companies this week, will we really know who is getting filthy rich on the back of the deal – or how?
Along that journey from the African farm where workers toil for a few dollars a day, or from the Latin American mine where employees risk lung disease, landslips and explosions, to the voracious factories and refineries of the developed and developing world, the middleman takes his cut.
And what a cut. Investors are putting a $61bn (£37.6bn) price tag on Glencore, which is selling some $11bn of its shares and which will – if all goes according to plan – be fast-tracked into the FTSE 100 index of London's biggest companies. That automatically means it is likely to be in the pension pots of millions of Britons.
Whether it is the fuel that heats our homes, the copper in our telephone wires or the cereal on the breakfast table, there is a good chance that the basic commodities of modern living have passed through the hands of a trader at Glencore. It moves around some 3 per cent of all the oil consumed in the world, and in some raw materials such as copper and lead it has half the market. Increasingly, it has bought mines outright, as well as just trading the output of others.
The almost 500 elite traders and dealmakers who have shared ownership of Glencore until now will be able to see, when the stock starts trading, just how fat their paper fortunes are. All will be multi-multi-millionaires. Five senior executives will become billionaires. The 54-year-old Ivan Glasenberg from South Africa, who joined Glencore as a coal trader a quarter-century ago and has been chief executive since 2002, could soon be worth more than $12bn.
Twelve billion dollars. That's about the size of the annual gross domestic product of the Democratic Republic of Congo (DRC), where Glencore has bought rights to mine some of the country's richest copper deposits.
"I observed a man sourcing candle wax from South America and selling it to Japan," Mr Glasenberg once told a business school magazine, to explain why he jumped from accountancy into trading. "I thought: 'That's unbelievable. Talking on the phone in his office, that man made money moving candle wax from one country to another.' It really interested me."
Three decades before Mr Glasenberg had his epiphany, the same lure of the fast buck brought an immigrant called Marc Rich to the commodities trading house Philipp Brothers in New York in 1954. A wily, fearless trader, he made a fortune for himself and for Philipp Brothers by finding ways around the Arab oil embargo of 1973, seeking out supplies from his contacts in the region and then selling the black stuff to desperate Western nations at a huge mark-up. A year later, fed up with sharing the profits, he and a small band of partners struck out on their own – and Glencore was born, under its original name: Marc Rich & Co.
To describe Glencore as "secretive" (as has been journalistic custom on the rare occasions it accidentally peeked above the radar) doesn't do it justice. Greenpeace, naming the company to its annual "Public Eye awards" hall of shame in 2008, described it as "quite literally impenetrable, and not just because of the coal dust rising from its mines in Colombia". The secrecy is by design. Not for nothing is it headquartered in the low-tax canton of Zug in Switzerland – neutral territory, and off-limits for the snooping eyes of regulators abroad.
It was to Switzerland that Marc Rich fled as a fugitive from US justice 28 years ago. He never returned. He is there still, aged 76, surrounded by Impressionist masterpieces and immersed in philanthropic works.
An ambitious public prosecutor called Rudy Giuliani indicted him all those years ago on charges of tax evasion and illegal oil trading with the Iranian revolutionary regime during the hostage crisis of 1980. As the Feds closed in, Customs officials stopped a Swiss Air flight on the tarmac at JFK Airport and discovered two trunks of Marc Rich & Co documents that the founder was trying to put out of reach in Zurich. Rich continued to run Glencore for a decade from Switzerland, even while on the FBI's most wanted list.
It was only financial problems that forced him to give up control in the mid-1990s, when the current generation of managers bought out their old mentor and removed his name from the letterhead. By the time former president Bill Clinton pardoned Rich on his last day in the White House (pardoned him on the criminal charges, although maintaining a threat of civil action), Glencore's founding father was long gone. But the obsession with secrecy that he instilled has remained.
Whether Glencore is really suited to life as a public company remains an open question. How will its executives cope with the circus of annual meetings, where pressure groups prod for answers and push environmental and workers' rights causes? Will the staff, the most senior of whom will now be forced to disclose the scale of their pay, prefer to bolt for new firms in the less transparent world of hedge funds? The company has always maintained it is not really secretive so much as just private. It always shared the financial details it had to with its trading partners, banking advisers and so on, it said.
Two early incidents suggest some discomfort in the limelight, though. The company's lawyers fired off an unusual pre-emptive letter via the UK Press Complaints Commission, warning that traders would not tolerate intrusions into their personal privacy or that of their families. And then the company's new chairman, Simon Murray, told a newspaper interviewer that female employees tended "to not be so involved, or so ambitious" and that "pregnant ladies take nine months off" – a flash of sexism that is barely acceptable in a gentleman's club, let alone in a FTSE 100 boardroom.
The flotation in London – the shafts of light shone by that 1,637-page prospectus, and by quarterly financial reports from here on in – will illuminate parts of the business, notably its finances. But investors and campaign groups are not so sure that they will penetrate its core. That core is on-the-ground deal-doing by Glencore's 2,800 staff, with their contacts across the chain of producers, shippers and buyers of commodities, and the competing casts of politicians and warlords who jealously guard, or zealously exploit, their domestic natural resources.
Ken Silverstein, an oil sector researcher for Global Witness, which campaigns against natural resource-related conflict and corruption, said: "Glencore's business model is based on operating in the shadows. It is not just about buying low and selling high, it is about how you gain access. Good traders have good ties to presidents and to governments and to heads of state oil companies.
"The prospectus obviously concentrates on how it has the best access in the industries in which it operates, and on the sophisticated traders it has, and the workaholic 35-year-olds, but that is not the only explanation. Success is also about your political contacts. Secrecy has always been part of the modus operandi of Glencore, and it will still be part of its modus operandi."
There is no getting away from the fact that some of Glencore's most important sources of raw materials – Kazakhstan, the DRC, Nigeria – score badly on the annual index of perceived corruption, as compiled by Transparency International.
Among the "risk factors" that the company sets out in the prospectus is that it is exposed to potential fraud or corruption, and that it may fail to live up to laws such as the UK's new Bribery Act, which punishes corporations in Britain for bribery at subsidiaries overseas.
But Glencore's pitch to potential investors is that it has left the freewheeling early years of Marc Rich behind it and built an impressive edifice of legal compliance checks and staff training that ensures its trading always stays in line with applicable laws and international standards. The UK Listing Authority and the accounting firm Deloitte have signed off on these procedures. Most of its giant prospectus is taken up with consultants' assessments of Glencore's own mining operations, including rulings on their compliance with human rights and union rights laws for workers, and environmental minimum standards. "Compliance", in fact, is the word of the document, appearing more than 250 times. The word "ethics", though, appears only once.
It could be the political situation in Kazakhstan which gives Glencore its first headache on joining the FTSE 100. Kazakhstan is run as an effective dictatorship by Nursultan Nazarbayev, who was re-elected last month with 95 per cent of the vote, after even his rival candidates said they voted for him. His family and inner circle have become increasingly wealthy over his 20-year rule. Bulat Utemuratov, the president's closest adviser, was the country's first billionaire – and he will pocket the first $2.2bn of Glencore's $11bn flotation proceeds in satisfaction for the transfer of control of the country's largest zinc miner, Kazzinc, to Glencore.
Opposition politicians and activists wrote to the London Stock Exchange last week to oppose the deal and to repeat the widely held suspicion that Mr Utemuratov and his investment company are fronts for President Nazarbayev personally. Glencore refused to respond to the allegation, and the investment company, Verny, claims it represents a variety of investors.
On the morning of 9 February, 2007, Bolivian government troops marched in to a Glencore tin smelter, slung a banner over the door and proclaimed it seized in the name of the state. Later in the day, before a crowd of supporters at the site, Bolivian president Evo Morales signed formal nationalisation papers. Glencore had acquired the smelter two years earlier from a former president, whose time in power had been marked by his becoming increasingly rich on natural resources investments, and its nationalisation was judged in Bolivia as punishment for the former president's allies.
This is all in a day's work for Mr Glasenberg and his billionaire lieutenants, and the flotation will allow them to do more deals and to become richer and more powerful. Until now, whenever a partner retires and wants to cash out, Glencore has to sell assets to fund his Faberge nest-egg. In the future, he can simply sell his shares on the open market, while Glencore can concentrate on buying things, from new sources of raw materials, to new drilling, mining or farming projects, and even whole companies.
In other words, if Glencore is big now, you ain't seen nothing yet.
Profile: Ivan Glasenberg, the CEO floating to the top
* When Ivan Glasenberg takes his morning jog around the Swiss town of Zug, a band of Glencore's top traders often join him.
It is a chance to get close to the boss, to pant through a conversation on the latest industry news, and to pump themselves up for another day inside the ultra-competitive commodities trading firm that Glasenberg has run since 2002.
Even for men much younger than the chief executive's 54 years, keeping up can be hard going. Glasenberg, who is married with two children, was a champion race walker in his youth, and in his twenties he was all set to compete at the Olympics for South Africa, only to be stymied when it was thrown out of the competition in protest at apartheid policies.
That was in 1984, when Glasenberg made his switch from accounting to trading, and set out on a journey that has made him a multibillionaire.
Beginning as a coal trader for Glencore in South Africa after an undergraduate degree at accountancy at Witwatersrand University in Johannesburg, it was quickly obvious that the driven workaholic with an MBA from the University of Southern California would be a rising star. When management bought out the firm from founder Marc Rich, Glasenberg was running the coal trading business and a favourite to succeed as chief executive – one race he ultimately did win.
What Glencore controls
60% of global zinc trade
3% of global oil trade
28% of global coal trade
50% of global copper tradeReuse content