Endeavour Mining (TSX: EDV; LSE: EDV) fired CEO Sebastien de Montessus with immediate effect on Thursday.
The board accused de Montessus of “serious misconduct” regarding the disposal of an asset and an irregular payment instruction for US$5.9 million, the company said in a release.
De Montessus said in a statement through a London-based public relations company that the payment in 2021 concerned security equipment for protection in a conflict zone. Endeavour has several gold operations and projects in West Africa.
“The decision had no additional cost to the company and did not benefit me personally in any way,” de Montessus said. “I omitted to inform the board that I had arranged for this offset, which I have freely accepted was a lapse in judgement.”
Endeavour, which is building the 2.7-million-oz. Lafigué project in Côte d’Ivoire, also said there were separate whistleblower allegations against the CEO last year. Those concerned his personal conduct with colleagues.
“No misconduct of any kind was discovered because none occurred,” de Montessus said. “I am proud of what we have built together at Endeavour over the past 8 years. I will take my time to consider my position with my advisers.”
The company named deputy board chair Ian Cockerill to replace de Montessus as CEO. Cockerill, a four-decade industry veteran, is a former CEO of Johannesburg-based Gold Fields (NYSE: GFI; JSE: GFI) and Anglo Coal, a unit of Anglo American (LSE: AAL).
“We continue to like Endeavour’s strong asset portfolio and peer-leading growth while acknowledging that the company will need to rebuild investor confidence,” BMO Capital Markets said on Friday.
“While we acknowledge the effectiveness of Endeavour’s whistleblower policy and the Board’s prompt action, the serious nature of the allegations against the outgoing CEO raises broader concerns around governance practices,” BMO mining analyst Raj Ray said in a note. “The Endeavour team has been well regarded not only for its operational excellence but also its peer-leading ESG credentials.
De Montessus had a notable career with Endeavour including several acquisitions after becoming CEO in 2016 as the company built its African assets.
The board also removed de Montessus as president and as a board director.
Shares in Endeavour recovered 1.6% to $26.40 apiece on Friday in Toronto after falling 10% on Thursday. The company is valued at $6.47 billion.
Greed is a wonderful thing and liars will continue to lie even if caught red-handed.