BROKERS for mining group ENRC have both resigned in recent weeks, adding further strain to the company as it deals with a fraud inquiry and a possible takeover bid from its major shareholders.
Deutsche Bank is believed to have stepped down at the end of April, around the same time ENRC’s chairman Mehmet Dalman and two other directors resigned.
Morgan Stanley left its role as broker shortly afterwards. The resignations mark the end of ENRC’s relationship with a pair of banks that helped it float on the London market in 2007.
ENRC said it is reviewing a shortlist of replacements.
Sources said Deutsche departed once it became clear that ENRC was not hiring the bank to help field a potential takeover offer from a consortium of major investors. The mining group has instead turned to Lazard and Credit Suisse.
Morgan Stanley, meanwhile, is said to have left in line with the Wall Street practice of stepping down when a client faces a fraud probe.
The Serious Fraud Office began formally looking into ENRC’s dealings in Kazakhstan and Africa last month.
Chief executive Felix Vulis told analysts yesterday he is confident that the firm has “applied responsive and responsible procedures”.
“As a large company, acting in interesting geographies, it would be surprising if ENRC did not attract opinion, both supportive and otherwise,” he said of the recent scrutiny of the company.
ENRC also revealed yesterday that freezing weather in Kazakhstan had dented its quarterly iron ore output.