Eurasian Natural Resources Corp., the Kazakh ferroalloy producer that held a corporate governance review, said Johannes Sittard will remain its chairman with Felix Vulis as chief executive officer.
Mehmet Dalman is the Senior Independent Director and Terence Wilkinson is appointed as an independent non-executive director, ENRC said in a statement today. Vulis has withdrawn his resignation and continues in his post with the full support of the board, the company said.
ENRC began the review on June 8 after shareholders voted against rehiring independent directors Richard Sykes and Kenneth Olisa. The exercise also followed Vulis’s Feb. 4 resignation amid board conflicts. He has remained in the post while the company sought a replacement. ENRC will now have 11 directors, six of them in independent non-executive roles.
The new board “has a clear majority of independent directors,” Sittard told reporters on a conference call after the statement. “So my being independent or dependent is now irrelevant.”
A row between independent directors and major shareholders began August 2009 as Chairman David Cooksey was replaced by then CEO Sittard, and Vulis was hired, Olisa said June 10.
“That appointment shifted the gravity of the board from independent chairman, independent non-executives and therefore independent board to basically dependent chairman and dependent directors,” Olisa said of the producer of metals in Kazakhstan.
Commitment to Independence
Billionaire ENRC founder Alexander Machkevitch applied for U.K. Listing Authority clearance to be chairman, the Observer reported Sept. 11. Paul Judge, one of two U.K. independent directors, opposes the bid and plans to become chairman himself, it reported.
The company isn’t considering selecting Machkevitch as chairman, Dalman said on the call today. “There’s no need for us to proceed with this anymore because we made a commitment to have an independent board.”
ENRC’s three founders, Machkevitch, Alijan Ibragimov and Patokh Chodiev, hold 14.6 percent of London-based ENRC, which makes ferroalloys, iron ore, aluminum and power in Kazakhstan.
Sittard said the founding shareholders aren’t involved in the operations of the company.
“I’m 100 percent convinced that the shareholders I’ve spoken to will be very supportive of this composition of the board and its independence,” Dalman said. “I will be very surprised if they will not.”
ENRC, which has dropped 28 percent in London trading since the review started, closed at 579.5 pence before the announcement, valuing the company at 7.5 billion pounds ($11.7 billion.)
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