(Reuters) -Endeavour Mining said on Thursday it had removed CEO Sebastien de Montessus with immediate effect, citing “serious misconduct”.
The action followed an investigation by the board into an irregular payment instruction of $5.9 million issued by him in relation to an asset disposal by the company.
De Montessus, who was also removed as president and from the board, said in an e-mailed statement that in 2021 he had instructed a creditor of Endeavour to offset an amount owed to the company to pay for essential security equipment to “protect our partners and employees in a conflict zone”.
“The decision had no additional cost to the company and did not benefit me personally in any way. I omitted to inform the board that I had arranged for this offset, which I have freely accepted was a lapse in judgement.”
He said this week he was given 48 hours’ notice of the concerns and “no proper opportunity to answer them”.
Endeavour’s Canadian-listed shares closed 10.07% lower on Thursday. Shares fell 7% on the London Stock Exchange on Friday.
“The termination could create substantial near-term uncertainty for the company and serve as an overhang as EDV looks to complete two key growth projects over the coming months,” RBC Capital Markets analyst Wayne Lam said in a note.
Endeavour also disclosed that allegations were made against de Montessus last year relating to his personal conduct with colleagues on its confidential whistleblowing channel.
“No misconduct of any kind was discovered because none occurred,” he added.
Meanwhile, the company has appointed Ian Cockerill, deputy chair of its board, as the new CEO.
Cockerill has over four decades of experience in the natural resources industry and previously held CEO positions at Gold Fields and Anglo Coal, a subsidiary of Anglo American.
La Mancha Investments, Endeavour’s largest shareholder, said on Friday it was “firmly in support” of the board’s move to replace de Montessus and believes the company’s “future is in very good hands” under Cockerill.
(Reporting by Shivani Tanna and by Arunima Kumar in Bengaluru; additional reporting by Ernest Scheyder in Houston; Editing by Shilpi Majumdar, Sriraj Kalluvila and Jonathan Oatis)