NIALL MCGEE, MINING REPORTER
PUBLISHED JANUARY 5, 2024
UPDATED YESTERDAY
Ousted chief executive Sébastien de Montessus had a history of going behind the backs of his superiors and conducting unauthorized business, well before the British gold mining company fired him for cause this week.
London-based Endeavour on Thursday said it terminated Mr. de Montessus after accusing him of “serious misconduct” related to a payment he authorized without the board’s knowledge.
Mr. de Montessus admitted he authorized a payment of US$5.9-million to a creditor in exchange for security services without getting permission from the board, and called it a “lapse in judgment.”
Before joining Endeavour, he worked for state-owned French nuclear company Areva SA for a decade between 2002 and 2012.
During his time at Areva, Mr. de Montessus hired a Swiss private investigator to look into a mergers and acquisitions deal the company had made, the disastrous top-of-the-market purchase of UraMin Inc. in 2007. Mr. de Montessus admitted he hired the PI without getting authorization from his boss at the time, Anne Lauvergeon.
Ms. Lauvergeon, who was known in France at the time as “Atomic Anne,” subsequently accused Areva of spying on her and her husband, the Financial Times said.
Mr. de Montessus denied the spying allegations, and declined any additional comment on Friday to The Globe and Mail.
More recently, in 2019, the Times reported that French authorities for five years had been investigating Mr. de Montessus for allegedly bribing a public official related to Areva’s purchase of UraMin.
Since March, 2018, Mr. de Montessus’s status in the investigation has been “mis en examen,” which means “under judicial inquiry.”
He denied the allegations to the British newspaper, and declined any further comment on Friday.
Mr. de Montessus joined Endeavour in 2015, three years after leaving Areva. He became CEO in 2016.
The Globe asked Endeavour why it had hired Mr. Montessus, considering his less-than-stellar track record at Areva, and why it continued to employ him amid a continuing French investigation. In response, the company referred The Globe to a public filing it made three years ago that addressed the matter.
In 2021, Endeavour admitted that the continuing investigation by France into Mr. de Montessus could hurt the company’s reputation, and damage its share price. Nevertheless, Endeavour determined that Mr. de Montessus was still fit to perform his duties as CEO.
The company said it would monitor his ability to perform and, depending on the outcome of the inquiry, might eventually require him to step down.
Shares in Endeavour fell by 10 per cent on Thursday on the Toronto Stock Exchange, but rebounded slightly on Friday, closing up 1.6 per cent to $26.40 apiece.
Endeavour on Thursday also accused Mr. de Montessus of engaging in personal misconduct with colleagues, but said that wasn’t a factor in his termination. The company declined to provide details of the alleged misconduct, but said concerns were raised through its whistle-blowing channel. Mr. de Montessus denied the allegations.
Endeavour is one of the biggest West Africa-focused gold miners. Under Mr. de Montessus, Endeavour bought several Canadian gold companies that had operations in the region, including Montreal-based Semafo Inc. and Toronto-based Teranga Gold Corp.
The company used to be based in Vancouver, but moved its headquarters to London a couple of years ago.
Endeavour Mining fires CEO Sébastien de Montessus, alleging ‘serious misconduct’
NIALL MCGEE, MINING REPORTER
DAVID MILSTEAD
PUBLISHED JANUARY 4, 2024
UPDATED JANUARY 5, 2024
Endeavour Mining Corp. has fired its chief executive, Sébastien de Montessus, alleging he engaged in “serious misconduct” around an “irregular payment” concerning an M&A transaction.
The company said in a statement on Thursday that the payment Mr. de Montessus allegedly misdirected was US$5.9-million and related to the sale of an asset.
The payment was uncovered in a review by the board of the company’s past mergers and acquisitions transactions. That review is continuing, the company said.
Mr. de Montessus wrote in a statement to The Globe and Mail that in 2021 he instructed a creditor to pay for essential security equipment for employees in a conflict zone as an offset for an amount owed to Endeavour.
“The decision had no additional cost to the company and did not benefit me personally in any way,” he said.
“I omitted to inform the board that I had arranged for this offset, which I have freely accepted was a lapse in judgement.”
Mr. de Montessus said he was given 48 hours’ notice of Endeavour’s concerns around the payment, and “no proper opportunity to answer them.”
Separately, Mr. de Montessus has been accused by Endeavour of engaging in personal misconduct with colleagues. The company did not give details, but said concerns were raised through its whistle-blowing channel in October. These allegations had no bearing on Mr. de Montessus’s termination.
Mr. de Montessus responded that “no misconduct of any kind was discovered because none occurred.”
Endeavour used to be based in Vancouver but is now based in London, England. The company’s shares trade on the Toronto Stock Exchange. The mining company operates a suite of precious metals mines in West Africa, and it has been one of the most active acquirers in the gold sector over the past five years.
Ian Cockerill, deputy chairman of Endeavour, is taking over as CEO on a permanent basis. Mr. Cockerill earlier in his career served as CEO of South African gold major Gold Fields Ltd.
Wayne Lam, an analyst with RBC Dominion Securities Inc., wrote in a note to clients Thursday that Mr. Montessus’s termination could create “substantial near-term uncertainty” for Endeavour over the next few months.
Shares in Endeavour fell by 10 per cent on the TSX to close at $25.98 apiece on Thursday.
Terminations for cause are extremely rare in the business world. By being fired for cause, Mr. de Montessus stands to lose a lot of money.
In the company’s annual proxy circular filed in April, Endeavour said that a severance payment to Mr. de Montessus – or any other executive – would not be payable if the person is terminated for cause.
At the end of 2022, Endeavour estimated that Mr. de Montessus would have been entitled to a termination payment of US$10.23-million as long as it wasn’t for cause. And if he retired, he would be entitled to US$3.03-million.
Endeavour paid Mr. de Montessus US$8.34-million last year, including US$3.44-million in stock awards. In 2022, he was paid US$18.1-million. That compensation included a special US$10-million retention payment. Mr. de Montessus was on track to receive a final US$2-million instalment of the retention bonus this year.
The Paris-educated Mr. de Montessus was appointed as CEO of Endeavour in 2016, after previously serving as a board member for less than a year. Before joining Endeavour, he served as CEO of La Mancha Group, an investment firm controlled by Egyptian billionaire Naguib Sawiris. La Mancha is Endeavour’s biggest shareholder. Earlier in his career, Mr. Montessus worked for French nuclear energy company AREVA Group, and before that as an M&A banker with Morgan Stanley in London.
Under Mr. de Montessus, Endeavour bought several Canadian gold companies that had operations in West Africa. In 2020, Endeavour acquired Montreal-based Semafo Inc., and Toronto-based Teranga Gold Corp., adding mines in Senegal and Burkina Faso.
Endeavour said in its annual proxy circular that as of March 24, 2023, Mr. de Montessus held 1,036,756 shares of Endeavour and 619,244 performance share units. At Thursday’s close, those holdings were worth about $43-million.
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