Glencore’s Kazakh Gulfstream – What Horrors

This has to be one of the most trivial complaints possible. Or even misleading. Glencore, the mining giant, bought a Gulfstream jet off a Kazakh businessman. It is entirely true that there were some interesting activities by that company in that country – the paying of school fees came up for example. And yet the buying of a jet plane just isn’t that odd:

Glencore acquired a private jet from a powerful Kazakh businessman who is a close ally of the country’s dictator. Ivan Glasenberg’s £42bn FTSE 100 mining and trading empire bought the Gulfstream G550 from Bulat Utemuratov in 2015, The Sunday Times has found. The previously undisclosed deal sheds new light on Glencore’s dealings in the former Soviet state at a time when the company is under growing scrutiny for its international activities. Utemuratov, 61, a former chief-of-staff to President Nursultan Nazarbayev, has been Glencore’s key business partner in Kazakhstan.

The implication is obvious here. Some dodgy dealing perhaps. And, well, here’s some relevant background.

The second hand value of those Gulfstreams dipped considerably a few years back. Various places were having a crackdown on such conspicuous consumption by the billionaire class. Enough so that the value dipped considerably in fact.

Considerably in that there had been a premium attached to an actually existing version of the plane. List price was $x but delivery for some future date. Market price of something that could be had now was $x plus. The crackdown on those rich b’stards led to that second hand price dropping to perhaps 50% of $x.

Someone like Glencore who didn’t have to worry about what local governments thought about rich b’stards owning stuff could therefore pick up something of a bargain. And some such companies did.

No, obviously enough, I don’t and you don’t and the Sunday Times doesn’t know quite exactly how this deal went down. But that background does aid in mulling over this story, doesn’t it?

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If it becomes the law that we first have to establish the moral worth of the seller, that would destroy the used car business.