ENRC Chairman Dalman Quits Amid Possible Shareholder Buyout Bid
Eurasian Natural Resources Corp. (ENRC) Chairman Mehmet Dalman resigned from his post amid a possible buyout bid for the mining company by founding shareholders and the Kazakh government.
Dalman was replaced by director Gerhard Ammann, the former chief executive officer of Deloitte in Switzerland, the London- based company said in a statement today. In addition, Dieter Ameling and Paul Judge won’t seek re-election to the board at the company’s June 5 general meeting, ENRC said.
ENRC appointed Dalman chairman in February 2012 to oversee a reorganization and improve corporate governance after corruption allegations against the company, which has operations in Kazakhstan, China, Russia, Brazil and Africa. The U.K.’s Serious Fraud Office is investigating payments made by an ENRC unit in Kazakhstan and anti-corruption groups have questioned its dealings in the Democratic Republic of the Congo.
“I have achieved all that I can as chairman of ENRC and it is therefore appropriate to hand over the reins to new leadership,” Dalman said in the statement. “I am confident that the interests of the minority shareholders will be well served by strong non-executive eirectors.”
Alexander Machkevitch said on April 19 he’s considering joining two fellow founders of ENRC and the Kazakh government in making an offer for the company, which mines chromium, manganese, iron ore and coal, among other things.
ENRC shares have declined 48 percent in the past year because of lower commodity prices and questions over corporate governance. The shares fell 0.6 percent to 282.3 pence at the close in London today.
The latest round of changes at the board come after a series of executive departures during the past two weeks. Chief Commercial Officer Jim Cochrane resigned from his position and his board seat on April 11. The company’s secretary and head of human resources have also resigned, a person familiar with the matter said yesterday.
In 2010, ENRC took control of copper and cobalt mines that Israeli billionaire Dan Gertler obtained from the Democratic Republic of Congo government, which had seized them from Vancouver-based First Quantum Ltd.
Anti-corruption groups including Global Witness have criticized the transaction, saying Gertler got the assets at low prices because of his close relationship with the nation’s president. Gertler denies he purchased companies at below-market rates. First Quantum also sued ENRC, which settled for $1.25 billion.
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