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File photo of drilling at a Katanga Mining operation.

Three Glencore PLC executives have resigned from the board of its Toronto-listed subsidiary Katanga Mining Ltd. after an internal review found "material weaknesses" in its financial reporting controls, amid a regulatory probe by the Ontario Securities Commission (OSC).

On Monday, Switzerland-based Katanga announced it is restating a number of financial documents, including its consolidated financial statements for the 2015 and 2016 fiscal years, and its management discussion and analysis (MD&A) for the quarters ending March 31, 2017 and 2016. The company also said its chief financial officer, Jacques Lubbe, was stepping down.

Katanga owns copper and cobalt operations in the Democratic Republic of Congo and is majority owned by Glencore, a giant Anglo-Swiss metals and mining conglomerate.

In July, Katanga first announced it was conducting a review of its past accounting, and indicated some of its financial statements would likely be restated.

On Monday, Katanga said the review was prompted by the OSC, which had already started an investigation into the firm. The Canadian regulator is investigating whether the company's previously filed financial statements were materially misleading.

The OSC is also looking into the conduct of certain unnamed directors and officers. Katanga's disclosure around "international bribery, government payment and anti-corruption laws" is also being looked into.

In a statement to The Globe and Mail on Monday, an OSC spokesperson confirmed the regulator's ongoing investigation of Katanga but declined to elaborate.

Katanga announced that its review found that, on a number of occasions, the miner had either overstated or overvalued its copper cathode production, inventories of concentrates and ore stockpiles.

For example, in 2014, Katanga overstated its copper cathode production by about 7,900 tonnes, which led to inventories being overstated by $41.8-million (U.S.).

The company said its review found that the miner had not maintained effective controls and that some of the accounting discrepancies resulted from certain senior management and executive directors "overriding" the company's processes.

In addition, the company said a revamped board was in its "best interests." Aristotelis Mistakidis, the billionaire head of Glencore's copper unit, and fellow Glencore executives Liam Gallagher and Tim Henderson resigned from the Katanga board as a result.

Three replacements from Glencore have been nominated to Katanga's board; Mike Ciricillo, who oversees Glencore's copper smelting and refining operations, chief financial officer Steven Kalmin, and Tony Moser from the finance department.

Katanga also said that Grant Sboros, deputy chief financial officer with Glencore affiliate Mopani Copper Mines PLC since 2013, is taking over the vacant CFO position.

The internal Katanga review went beyond its financial statements. It also revealed a number of oversights regarding compensation paid to current and former executives. Katanga acknowledges it failed to disclose millions of dollars in compensation paid to some 13 management individuals. Jeff Best, Katanga's chief executive officer until 2015, received $1.6-million that was not previously disclosed. Johnny Blizzard, the company's current CEO, received $800,000. Mr. Lubbe, the company's outgoing CFO, received $250,000.

Glencore said it will be implementing "structural and control changes" across its copper department to strengthen its financial processes and procedures. The company also said it is committed to ensuring "weaknesses identified in the review are addressed and do not reoccur."

Shares in Katanga were down on Monday by as much as 8 per cent at one stage, but recovered to close down 3.2 per cent on the Toronto Stock Exchange.

Glencore, whose primary listing is on the London Stock Exchange, closed up 1.8 per cent.

This was the second controversy to affect Glencore in the past month.

A few weeks ago, Glencore was one of a number of large international firms named in the so-called Paradise Papers, a massive data leak involving millions of files believed to have originated from Bermuda-based offshore law firm Appleby.

According to Britain's The Telegraph, the leaked documents highlight Glencore's relationship with Israeli businessman and Katanga shareholder Dan Gertler, who allegedly used bribery to win mining permits.

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