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| ENRC chairman quits amid internal inquiry into corruption allegations | ENRC chairman quits amid internal inquiry into corruption allegations |
| (5 months later) | |
| Mehmet Dalman, the chairman of Eurasian Natural Resources Corporation, has resigned from the troubled FTSE-100 mining group where he had been leading an internal investigation into a string of corruption allegations. | Mehmet Dalman, the chairman of Eurasian Natural Resources Corporation, has resigned from the troubled FTSE-100 mining group where he had been leading an internal investigation into a string of corruption allegations. |
| The company immediately unveiled his replacement, non-executive director Gerhard Ammann, while also announcing that Dieter Ameling and Sir Paul Judge would not be standing for re-election as directors at the group's annual meeting in June. | The company immediately unveiled his replacement, non-executive director Gerhard Ammann, while also announcing that Dieter Ameling and Sir Paul Judge would not be standing for re-election as directors at the group's annual meeting in June. |
| The boardroom changes came on top of a series of other recent executive departures from the company. ENRC's law firm Dechert, which had been hired to conduct the investigation and report its findings to the Serious Fraud Office, has also parted company with the group. The controversial founders, Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov, who own 44% of the company's shares – also stated last week that they were considering an attempt to take ENRC private again. | The boardroom changes came on top of a series of other recent executive departures from the company. ENRC's law firm Dechert, which had been hired to conduct the investigation and report its findings to the Serious Fraud Office, has also parted company with the group. The controversial founders, Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov, who own 44% of the company's shares – also stated last week that they were considering an attempt to take ENRC private again. |
| Ammann said: "I would like to express the group's thanks to Mehmet Dalman, who has been one of our longest-standing directors. Prior to becoming chairman of the group, Mehmet oversaw all of the group's acquisitions as chairman of the mergers and acquisitions committee. His initiatives to improve corporate governance have established a foundation on which we can build in the weeks and months ahead." | Ammann said: "I would like to express the group's thanks to Mehmet Dalman, who has been one of our longest-standing directors. Prior to becoming chairman of the group, Mehmet oversaw all of the group's acquisitions as chairman of the mergers and acquisitions committee. His initiatives to improve corporate governance have established a foundation on which we can build in the weeks and months ahead." |
| Dalman added: "I believe 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 added: "I believe I have achieved all that I can as chairman of ENRC and it is therefore appropriate to hand over the reins to new leadership." |
| The news followed a string of leaks that Dalman was on the verge of quitting over "issues of principle", despite repeatedly having staked his reputation on clearing up the mess at ENRC. The company's efforts to get to the bottom of corruption allegations contributed to the shares being the worst performer in the FTSE 100 last year. It also comes just 14 months after Dalman replaced Sir Richard Sykes as chairman, after he and director Ken Olisa were ousted in a boardroom coup backed by the founding directors. | The news followed a string of leaks that Dalman was on the verge of quitting over "issues of principle", despite repeatedly having staked his reputation on clearing up the mess at ENRC. The company's efforts to get to the bottom of corruption allegations contributed to the shares being the worst performer in the FTSE 100 last year. It also comes just 14 months after Dalman replaced Sir Richard Sykes as chairman, after he and director Ken Olisa were ousted in a boardroom coup backed by the founding directors. |
| A source close to ENRC's board added: "[Dalman] has been front-running his departure for weeks and trying to tee up a glorified exit." | A source close to ENRC's board added: "[Dalman] has been front-running his departure for weeks and trying to tee up a glorified exit." |
| However, any efforts by the former chairman to distance himself from the troubled culture within ENRC might prove difficult, as he had sat on the board as an independent director since its 2007 flotation and before that had sealed a financial relationship with one of the three founders of the mining group. | However, any efforts by the former chairman to distance himself from the troubled culture within ENRC might prove difficult, as he had sat on the board as an independent director since its 2007 flotation and before that had sealed a financial relationship with one of the three founders of the mining group. |
| Dalman used his company, WMG, to invest on behalf of Ibragimov, and the former investment banker subsequently sold the fund to the oligarch, who put his ENRC shares into the fund. A spokesman for Dalman said that the relationship came to an end when the financier sold to Ibragimov – although company filings seen by the Guardian suggest a relationship was still in place two months later. | Dalman used his company, WMG, to invest on behalf of Ibragimov, and the former investment banker subsequently sold the fund to the oligarch, who put his ENRC shares into the fund. A spokesman for Dalman said that the relationship came to an end when the financier sold to Ibragimov – although company filings seen by the Guardian suggest a relationship was still in place two months later. |
| Asked if his earlier relationship with Ibragimov suggested a conflict of interest as an independent director, Dalman said: "You want a quotation? I'm happy to give you access to whatever documentation you need to satisfy yourself that there isn't a conflict of interest." | Asked if his earlier relationship with Ibragimov suggested a conflict of interest as an independent director, Dalman said: "You want a quotation? I'm happy to give you access to whatever documentation you need to satisfy yourself that there isn't a conflict of interest." |
| He declined, however, to say how much money his firm had been paid by Ibragimov, but insisted it was "probably zero". | He declined, however, to say how much money his firm had been paid by Ibragimov, but insisted it was "probably zero". |
| One source close to the trio said: "Yes, Dalman was viewed as Alijan's [Ibragimov] guy. This was because Dalman created a wealth management company called WMG and Alijan was one of the biggest clients in the company, as it managed some of his assets … Alijan championed him for a board seat during the original listing and subsequently for a promotion after Ken Olisa and Sir Richard Sykes were voted off the board." | One source close to the trio said: "Yes, Dalman was viewed as Alijan's [Ibragimov] guy. This was because Dalman created a wealth management company called WMG and Alijan was one of the biggest clients in the company, as it managed some of his assets … Alijan championed him for a board seat during the original listing and subsequently for a promotion after Ken Olisa and Sir Richard Sykes were voted off the board." |
| The exact nature of the relationship between Dalman, who has also been known as Mehmet Shoukru, and Ibragimov has rarely been mentioned in public and warranted one sentence in ENRC's 400-page flotation prospectus in 2007. | The exact nature of the relationship between Dalman, who has also been known as Mehmet Shoukru, and Ibragimov has rarely been mentioned in public and warranted one sentence in ENRC's 400-page flotation prospectus in 2007. |
| The same prospectus also outlined areas of potential concern for future investors, including the existence of a complex structure called the Russian Trading System (RTS), which the document stated involved sales made by ENRC to a chain of third parties and resulted in cash payments to ENRC's three founders. Their representatives declined to comment. | The same prospectus also outlined areas of potential concern for future investors, including the existence of a complex structure called the Russian Trading System (RTS), which the document stated involved sales made by ENRC to a chain of third parties and resulted in cash payments to ENRC's three founders. Their representatives declined to comment. |
| Meanwhile, a presentation given to the SFO last year by the ENRC's then law firm, Dechert, outlines allegations concerning the purchase of a farm in Kazakhstan by a director of the ENRC subsidiary SSGPO. It states that the acquisition and running costs of the farm were "paid from SSGPO funds" and that the farm was owned via a "nominee shareholding on behalf of SSGPO president and major shareholder, Alijan Ibragimov". | Meanwhile, a presentation given to the SFO last year by the ENRC's then law firm, Dechert, outlines allegations concerning the purchase of a farm in Kazakhstan by a director of the ENRC subsidiary SSGPO. It states that the acquisition and running costs of the farm were "paid from SSGPO funds" and that the farm was owned via a "nominee shareholding on behalf of SSGPO president and major shareholder, Alijan Ibragimov". |
| Representatives of Ibragimov declined invitations to comment on the document and it is not yet clear what if any action the SFO may take. | Representatives of Ibragimov declined invitations to comment on the document and it is not yet clear what if any action the SFO may take. |
| Departures from ENRC this month | Departures from ENRC this month |
| Mehmet Dalman Chairman | Mehmet Dalman Chairman |
| Tony McCarthy Head of human resources | Tony McCarthy Head of human resources |
| Stuart Nolan Group head of reward | Stuart Nolan Group head of reward |
| Alex Gaft Corporate investigator | Alex Gaft Corporate investigator |
| Victoria Penrice Company secretary | Victoria Penrice Company secretary |
| Jim Cochrane Chief commercial officer | Jim Cochrane Chief commercial officer |
| Teresa Jordan Group financial controller | Teresa Jordan Group financial controller |
| Victor Hannah Head of Africa (voluntary leave of absence) | Victor Hannah Head of Africa (voluntary leave of absence) |
| Leaving in June | Leaving in June |
| Sir Paul Judge Non-executive director | Sir Paul Judge Non-executive director |
| Dieter Ameling Non-executive director | Dieter Ameling Non-executive director |
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