Trafigura Founder Dauphin Exits as CEO for Medical TreatmentAndy Hoffman
Trafigura Beheer BV, the world’s second-biggest metals trader, said 63-year-old Claude Dauphin stepped aside as chief executive officer for medical treatment and will be replaced by the head of its mining unit.
The exit of the Marc Rich protege and Trafigura co-founder forced the company to accelerate succession plans, naming Jeremy Weir as CEO immediately, Victoria Dix, a spokeswoman, said today by phone. She declined to identify Dauphin’s medical condition.
Weir, an Australian who joined the Amsterdam-based company in 2001 and also led its hedge fund Galena Asset Management, was due to take over at the end of September, Dix said. Dauphin, a French citizen with U.K. residency who is the largest owner with a stake of less than 20 percent, was named executive chairman.
“Claude Dauphin has been a great leader for this business and the entire industry,” Roland Rechtsteiner, who teamed with Trafigura co-founder Graham Sharp to author reports on commodity trading for consultant Oliver Wyman, said in a phone interview. “He is very well connected and there is nobody important in the commodities sector that he doesn’t know or doesn’t know him.”
The new CEO will need to manage a period of upheaval and opportunity in commodity trading as banks such as JPMorgan Chase & Co. and Morgan Stanley cut back business amid a crackdown by regulators on risky operations after the financial crisis. Weir also needs to meet expectations set by a predecessor, the last of the firm’s six founders with an executive role, who almost tripled revenue in the past five years to $133 billion by 2013.
Before joining Trafigura, Weir, 50, spent nine years at NM Rothschild & Sons Ltd., where he established its non-ferrous metals derivatives business, Galena said on its website.
Dauphin has had an eventful career in commodities, learning the trade at Marc Rich’s firm in Switzerland. Rich, the trader celebrated for inventing the spot-oil market, fled the U.S. to avoid federal indictments during the 1980s before being pardoned two decades later by President Bill Clinton. As Trafigura CEO, Dauphin spent five months in an Ivory Coast jail in 2006 and 2007 over a dispute involving alleged dumping of toxic waste.
The company he founded 21 years ago paid a settlement in 2009 that wasn’t an admission of liability, it said at the time.
Banks are exiting or shrinking their commodity businesses as regulators increase scrutiny on lenders owning, storing and marketing oil, metals and agricultural products. Revenue for the 10 largest investment-bank commodity operations had slumped to $4.5 billion by last year from about $14 billion in 2008, according to the London-based analytics company Coalition.
The trend creates opportunities for non-bank commodity traders including Trafigura and competitors such as Mercuria Energy Group Ltd. and Glencore Xstrata Plc, the world’s biggest metals trader. Mercuria agreed to purchase JPMorgan’s physical commodities unit for $3.5 billion on March 19.
The board of Trafigura, which also grew under Dauphin to become the world’s third-largest independent oil trader, agreed on the management changes on March 21, Dix said.
Mariano Marcondes Ferraz, head of affiliate DT Group, joined the management board, Trafigura said in a statement.