Monday 23 November 2020 10:15 am

Petropavlovsk appoints KPMG as independent forensic investigator

Russian gold mining company Petropavlovsk has appointed KPMG to undertake a forensic investigation into certain business deals made in the last three years. 

The investigation will examine deals between Petropavlovsk and its subsidiaries, and fellow mining company IRC and its subsidiaries in the three years to August 2020.

Read more: PwC resigns as auditor of gold miner Petropavlovsk on governance concerns

The investigation was proposed at Petropavlovsk’s general meeting on 10 August and approved by 84% of shareholders. KPMG’s investigation will start immediately.   

Petropavlovsk’s board believes it has already identified several areas that warrant further enquiry, and passed information on to KPMG.  

Chairman James Cameron said: “Petropavlovsk has failed to deliver value to its shareholders and employees over many years, and we believe that poor governance and controls have been a major contributory factor. 

“The current board is committed to transparency and exposing any historic instances of failed corporate governance, as well as to the recovery of any misappropriated funds or assets.” 

Company strife

The investigation’s launch comes after deputy chief executive Alya Samokhvalova left the company after nearly two decades.

She took on the role of temporary chief executive during Petropavlovsk’s summertime boardroom battle, which culminated in Samokhvalova, as well as former chief Pavel Mavlovskiy and founder Hambro being voted out of the company.

Read more: Petropavlovsk shareholders set for crunch vote after months of boardroom strife

Last month Russian authorities began investigating chief executive Maksim Meshcheryakov after he forced his way into the FTSE 250 company’s offices in Moscow.

On 26-27 August, was prevented from entering the firm’s office in a stand-off with staff.

CCTV footage showed Meshcheryakov, who was appointed only in August, climbing over turnstiles to get into the office.

At the time, the company said that Meshcheryakov had “encountered a lack of co-operation from some employees and ex-employees in certain of the Russian subsidiaries as he works to implement a robust and transparent controls framework across Petropavlovsk”.

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