- Announcement made after UK close yesterday
- Endeavour shares down 16% year-to-date
- Deputy chairman to assume top role
Shares in Endeavour Mining (EDV) took a dramatic turn this morning, falling over 14% to £14.52 at one point, as the mining group said chief executive and executive director Sebastien de Montessus’s contract had been terminated with immediate effect for ‘alleged serious misconduct.’
TROUBLE AT THE TOP
The company said de Montessus had issued an irregular payment instruction for $5.9 million in relation to an asset disposal undertaken by Endeavour.
The alleged misconduct was identified as part of a review of acquisitions and disposals, which is ongoing.
In addition, the company revealed the board was considering a course of action against de Montessus having received findings from an external investigation into allegations regarding his personal conduct.
The golden strategy delivering big success for Endeavour Mining in West Africa
AJ Bell investment director Russ Mould commented: ‘The abrupt sacking of gold producer Endeavour Mining’s chief executive Sebastien de Montessus has inevitably caused jitters among the company’s shareholders.
‘The fear, rightly or wrongly, will be that what has been reported to date is just the tip of the iceberg. Also, de Montessus’ comments on his departure suggest he is unlikely to take the news lying down.
‘Even if his explanation for the flagged irregular payment stands up, the allegations around personal conduct with colleagues add another layer to this scandal and are an uncomfortable echo of the departures of incumbent CEOs at BP (BP.) and McDonald’s (MCD:NYSE) in recent years. They may also pose questions about the wider culture of the mining business.
‘With the company expected to announce its full year results before the end of the month, Endeavour will need to report a solid operational and financial performance if it wants to start the process of winning back the market’s trust.’
DEPUTY CHAIR TO STEP IN
Ian Cockerill, Endeavour’s current deputy chair and an experienced mining executive, will assume the chief executive and executive director roles with ‘immediate effect’.
Cockerill was previously chief executive of Gold Fields and Anglo Coal and will need to review his other directorships before taking on his new position.
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell.
