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Endeavor Mining asked its longtime law firm, Linklaters, to investigate. ousted CEOSebastien de Montesse was arrested despite complaints from employees of the gold producing company about the company's independence, three people familiar with the matter said.
Internal critics who spoke to the Financial Times said Mr Linklaters' relationship with Endeavor, which had flourished under Mr de Montesse's tenure and had given the „magic circle“ law firm millions of pounds, It argues that this means it lacks the independence necessary for an impartial investigation into the incident. behavior of the president.
of FTSE 100 Gold Mining Group He fired his long-time boss, Mr. de Montesus, earlier this month after the board discovered evidence that he had directed a fraudulent $5.9 million payment.
Mr de Montess fired back, claiming that although he did not notify the board of the payments, they were paid to provide emergency security services. Linklaters was in charge of forensic accounting investigation The FT previously reported that it was included in the payment instructions with EY.
At the time of his dismissal, Endeavor also said the board would consider next steps after investigating De Montesse's personal conduct with colleagues. Endeavor did not say what allegations were made about his actions. This study was also conducted by Linklaters.
The mining company said Friday it „strongly supports“ its initial statement. Mr. Linklater was appointed after careful consideration of the relevant expertise and safeguards in place to ensure the fairness of the investigation, a person close to the company said.
De Montesse said he was considering his legal position after „an independent investigation by Mr. Linklaters did not substantiate any of the allegations of personal conduct.“
The Endeavor scandal tarnishes one of the few recent success stories of the London market, which has grown from a market capitalization of about $1.5 billion to a peak of nearly $7 billion. through active trading Under a charismatic French CEO.
During the course of the investigation, Endeavor employees directly raised concerns about independence with at least one board member and the law firm, according to communications seen by the FT and people familiar with the matter.
Mr. Linklaters' services to Endeavor during Mr. de Montessus' tenure included advising on IPOs, debt, M&A activity, and corporate governance. This includes guidance for the board of directors after French authorities in 2018 investigated de Montesus for corruption charges related to his time at French nuclear power group Areva. Ta. An investigation by French authorities continues despite de Montesse denying any wrongdoing.
Ian Hunter, a corporate partner at Linklaters, was responsible for managing the relationship with Endeavor. The law firm advised Endeavor's board of directors on De Montesse's compensation package, which resulted in him earning $22.7 million in 2021. Most of the FTSE 100 CEOs.
Mr. Linklaters also represented the company in connection with a series of dismissals of senior executives and directors starting in early 2022 who sought to raise concerns about corporate governance deficiencies and Mr. De Montesse's conduct, the people said. It is said that he served as a person. . The law firm's advice also included drafting a non-disclosure agreement.
Henri Servas, a professor of corporate governance at London Business School, said that when investigating sensitive matters involving senior staff, it is better to hire law firms that have no prior experience with the company.
„The bottom line is that in a situation like this, you don't want to appear to have a conflict of interest. Even if it were completely well-managed and completely free of bias, the appearance of a conflict could be a sign of the issue at hand. It’s not good from a perspective.”
Law firms are frequently asked to conduct internal investigations for their clients, often involving attorneys from different teams within the firm. The scope and reporting lines of the investigation, and who gets to know the information, is typically at the discretion of the company and law firm.
„We are committed to maintaining the highest standards of honesty and integrity and to acting in accordance with applicable professional obligations,“ Linklaters said in a statement.
“We have robust processes in place to prevent conflicts of interest,” the company added.
Mr. de Montesus declined to comment.