Symbol go
GD RT         Turnover  mln.

UPDATE: ENRC's New Board Faces Familiar Governance Questions


--ENRC's revamped board meets with shareholders as it seeks to put an end to corporate governance concerns

--ENRC conducting internal investigation into whistleblower allegations over its Kazakh, Africa operations

--ENRC says it has a zero-tolerance policy to bribery and corruption across all its operations


(Updates to add Global witnesses response to Fleurette's independent audit review in second-to-last paragraph.)

   By Alex MacDonald 

LONDON--Shareholders of Kazakhstan miner Eurasian Natural Resources Corp. PLC (ENRC.LN) met with the company's revamped board Tuesday as the U.K.-listed miner sought to put an end to governance concerns regarding acquisitions in Congo and the board's relationship with its three-founding shareholders.

The FTSE-100 company has sought to repair its reputation following public criticism related to its 2010 purchase of the disputed Congolese Kolwezi copper-and-cobalt tailings project, and a boardroom spat over the founding shareholders' influence over the board that spilled into the public arena last summer and resulted in the ousting of two independent board directors.

Analysts have said that clarity about ENRC's dealings in Africa, and the pending conclusion of an internal investigation over whistleblower allegations about its operations in Kazakhstan and Africa, could support its share price, which trades at a discount to its peers.

"I would like to see some clarification of the ownership of those [African assets]...who those partners are" and how the company plans to develop the assets, said Panmure Equity analyst Gavin Wood.

ENRC sought to settle all outstanding legal disputes over Kolwezi's ownership by striking a $1.25 billion deal to buy the remaining residual Congolese assets from the project's former owner, Canada-based First Quantum Minerals Ltd. (FQM.T, FQVLF).

In February, the miner appointed investment banker Mehmet Dalman as its nonexecutive chairman, a move aimed at appeasing minority-shareholder concerns over the alleged influence of the founders. Since then, Mr. Dalman has appointed two new nonexecutive members to the board.

Mr. Dalman also faced calls to provide more clarity about ENRC's Congolese deals.

Anticorruption activist group Global Witness recently questioned whether Congolese government officials could have profited from five transactions, including the purchase of a stake in the SMKK copper and cobalt mine in 2009, the Kolwezi tailing projects and the subsequent settlement with First Quantum that included the Frontier and Lonshi assets.

Global Witness said the deals resulted in inflated prices and payments of hundreds of millions of dollars to offshore accounts owned by Israeli businessman Dan Gertler and unnamed associates.

Fleurette, Mr. Gertler's holding company, said it had paid a fair price for the assets and said it had offered Global Witness an independent audit in order to establish the ultimate beneficiaries of companies belong to the Fleurette Group, an offer it says Global Witness turned down. Global Witness said this was incorrect, adding it would be happy to discuss the audit offer and had told Fleurette so on numerous occasions.

ENRC said in a statement it "is committed to upholding the highest standards of corporate governance and implements a zero-tolerance policy to bribery and corruption across all of our operations."


Write to Alex MacDonald at


(END) Dow Jones Newswires

June 12, 2012 15:03 ET (19:03 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

Follow to Social Media
  Did you find this article interesting?: