LONDON (Reuters) - Commodities trader Glencore (>> Glencore International Plc) faced calls for greater transparency around its deals in Congo, one of its most promising but most controversial jurisdictions, as it prepares for its first shareholder meeting since listing.

Anti-corruption campaign group Global Witness, in a new memo reviewing mining transactions in Congo since 2010, said Glencore should provide more detail on what it said were "potentially corrupt deals" in the country and on its relationship with an influential Israeli businessman, Dan Gertler.

Glencore and Gertler, it said, should release the full list of shareholders of all offshore companies involved in Glencore ventures in Congo, adding there was a risk those shareholders could include "corrupt Congolese officials or their proxies".

Global Witness said both Glencore and Gertler had challenged its facts and categorically denied involvement in corruption.

Glencore, which will hold its maiden shareholder meeting in the Swiss town of Zug on Wednesday, said it had a clear anti-corruption policy and "offering, paying, authorizing, soliciting or accepting bribes is unacceptable to Glencore".

Fleurette Group, owned by a trust for the benefit of the Gertler family, said it had engaged with the campaign group but rejected any allegation of impropriety and denied wrongdoing.

The Global Witness report, which examines the issue of mining stakes sold by the Congo state, does not accuse Glencore of corruption. But its probe into Glencore's deals in the central African country comes at an awkward time for the world's largest diversified commodities trader.

Glencore, a target for campaigners since its listing last year after almost four decades as a private company, agreed in February to a $36 billion takeover of Xstrata (>> Xstrata PLC) and is currently wooing the miner's institutional and small shareholders, some of whom argue they are not being offered enough premium for the combined company's higher risks.

"(Xstrata shareholders) probably are already using this as an argument for a better deal," said analyst Nik Stanojevic at stockbroker Brewin Dolphin.

"But the counter-argument Glencore might use is that although there is more risk, there is also better growth, and valuation already takes this into account."

Xstrata's own assets are by and large in established mining jurisdictions, from Australia to Chile, while Glencore has been happier than its major mining rivals to tread in riskier, high potential areas, in exchange for better returns.

"Most people know what they are getting themselves into with Glencore; they know they do not operate in normal environments and (sometimes in) jurisdictions where not everyone is completely transparent," analyst Cailey Barker at Numis said.

"It is more likely to affect their PR than their investors."

Glencore, which already owns 34 percent of Xstrata, is offering 2.8 new Glencore shares for every Xstrata share held.

While Glencore's chief executive said last week he had the support of most shareholders, Xstrata's small investors could sink a deal requiring 75 percent backing, excluding Glencore. They flexed their muscles last week, with over a third of voting shareholders rejecting Xstrata's pay plan.

CONGO PROMISE

Glencore has been in Congo since 2007 when it made an initial investment in Nikanor, a miner seeking to revive copper mines in Congo's lucrative Katanga province, alongside Gertler. The investment became a majority stake after the global crisis, and Glencore later merged the miner with rival Katanga to create an operation that will produce 308,000 tonnes of copper by 2015.

It also has a stake in copper and cobalt producer Mutanda mine, where it is ramping up production, and the nearby Kansuki greenfield project. It hopes to combine the two, with a view to ultimately holding a majority stake in the combined entity.

Ore grades in Congo's copper belt are among the highest in the world - 4.2 percent of copper content per tonne in Katanga and 3.4 percent in Mutanda, compared with less than 1 percent for giant, historic copper mines in more mature jurisdictions owned by rivals, like Chile's Collahuasi and Escondida.

But operating in Congo carries high risks, not just operationally but also to miners' reputations. The involvement of miner ENRC (>> Eurasian Natural Resources Corporation) in the purchase of a Congo copper operation expropriated from a rival hit its share price, dealing a blow it is still recovering from, even after a $1.25 billion legal settlement with the previous owner earlier this year.

ENRC bought control of the operation, Kolwezi, from a company owned by the prominent but very private Gertler.

Global Witness said it was concerned by the sale of Congolese state mining body Gecamines' stakes in Kansuki and Mutanda to offshore companies associated with Gertler in 2011, arguing the deals were conducted in secret, and involved companies whose full list of shareholders are not known.

The sales of those Gecamines stakes were made public in Glencore's IPO prospectus. The 25 percent Kansuki stake was sold for $17 million, below its commercial valuation of as much as $209 million, Global Witness said, though Gertler representatives disputed this valuation.

"There is a considerable amount of risk attached to these investments, and no other party was prepared to pay a fraction of the sum paid by Fleurette," a spokesman said.

Global Witness said Glencore's shareholders should demand a full external audit of its activities in Congo, warning the trader's participation in "secretive and cozy deal-making" could hurt it in any future government reviews of contracts and could "expose shareholders to corrupt practices".

(Editing by Will Waterman)

By Clara Ferreira-Marques