Little change for ENRC board
“An internal review at Eurasian Natural Resources Corp, launched after of a corporate governance debacle that saw two directors ousted at the mining company’s annual meeting, has left the management and board almost unchanged. Johannes Sittard, chairman and former chief executive, remains chairman. Felix Vulis, who resigned in February citing commitments in his family life, has been restored as permanent chief executive.
The three-month review of corporate governance at the embattled FTSE 100 company, which has lost almost half its stock market valuation in 2011, includes the board appointment of Terence Wilkinson, a former chief executive of Aim-quoted Ridge Mining and Lonrho. The review, which concluded on Wednesday night, focused on whether the board of ENRC, a company that is largely controlled by three central Asian entrepreneurs with no board seats, should remain fully independent of the three men or become a more actively family-controlled miner akin to Vedanta, Fresnillo, and Antofagasta.”
- One of ENRC’s founders, mr. Alexander Mashkevich, was rumoured to be interested to take over the presidency of the company. However, within days of the publication of this story the results of the review were announced.
- The review restored a majority of independent board members for the company, which was lost after various board members left or were not reelected earlier this year in a power struggle in the board.
- In the current situation about 70% of the shareholders are not represented in the board. This might lead to disagreement between board and shareholders in the case of a potential takeover bid. In June Glencore was said to be interested in buying ENRC, which has lost a lot of market value in the past year.
- The Kazakh government and Kazakhmys together hold close to 40% of the shares. Both parties will not be in favor of the 3 founders (the Troika) gaining more control over the company and will be happy mr. Mashkevich does not join the board.
©2011 | Wilfred Visser | thebusinessofmining.com