ENRC, the FTSE 100 resources group that has been hit by a string of corporate governance issues, is facing further questions over the actions of a senior executive.
According to allegations highlighted in an investigation carried out by the law firm Dechert, at least $100m in questionable payments has been paid out by the company over four years to companies associated with the executive, who still works for the group.
Dechert’s report, City A.M. understands, highlights an apparent lack of related party disclosures to the board and regulators and points out that works have been performed by contractors with no previous experience in mining and without a licence.
The Dechert report has been passed to the Serious Fraud Office, which has been looking into possible transgressions at ENRC since it listed in London.
Mehmet Dalman, ENRC’s chairman and a former investment banker, said yesterday that the company was still in the process of self-reporting to the Serious Fraud Office. “We also have a whistleblowing system,” he said. “Everything is being fully dealt with and investigated.”
He said there was no reason to take any action against any of his executives. “If I was to act on every allegation I would fire people every day,” he said. ENRC’s shares, which traded at more than 900p in 2011, closed up three per cent at 342p yesterday.
ENRC was torn apart two years ago when two independent directors were voted off the board.