- Endeavour Mining fired Sebastien De Montessus in January
- The miner now says he redirected a total of $21mn away from company coffers
London’s largest gold miner Endeavour Mining (EDV) has said former chief executive Sebastien De Montessus channelled a further $15mn (£12mn) away from the company to an unidentified third party.
The miner fired De Montessus in January over a $5.9mn payment he arranged to be paid to the same third party for what he said was a critical security bill. After an investigation, Endeavour alleged the security bill explanation was false.
“Based on the information given by Mr de Montessus in interviews and the other evidence available to the investigation [including the evidence that Mr de Montessus had caused $15mn to be paid by Endeavour to the same third-party company in different circumstances in 2020], his explanation was found to be implausible and untrue,” Endeavour said.
The newly reported payments of $15mn took place in 2020 and went to the same UAE-registered company as the $5.9mn, which was paid the following year. Endeavour said it did not identify any bribery or corrupt behaviour but could not find the beneficial owner of this UAE entity. De Montessus said he did not mislead the company's investigators and the $15mn had been properly accounted for.
“I co-operated fully with the investigation and am extremely disappointed that I have once again been denied the opportunity to respond to specific allegations before they have been published," he said. "$15m was advanced to an established Endeavour contractor, Endeavour did not suffer any loss from that arrangement and it did not benefit me personally. Contrary to the impression given by the announcement, I understand those sums were properly offset against invoices from that contractor. I will consider my next steps carefully.”
Endeavour has said it could chase De Montessus for “recovery of amounts lost by the Group”. Two class action lawsuits have been filed in Ontario over the situation, with law firms looking for investors who bought in between 2021 and 3 January of this year, before the $5.9mn payment was revealed.
The whole fiasco started when the former CEO asked Allied Gold, a separate business that had bought a mine from Endeavour, to send its final payment to the 'security contractor'. De Montessus has said since he lost his job the company’s allegations were overblown, and he had merely skipped due process.
The company did say it had written off the $5.9mn owed by Allied as a receivable at the end of September 2023, “based on further deliberate false representations by Mr de Montessus”.
In January, the company announced it would claw back or cancel $29mn in bonuses from the former CEO. De Montessus said he was “disappointed with the way this matter has been handled”.
The West African gold miner said it would not need to make material restatements to its 2020 and 2021 accounts. However, it flagged a new related party transaction for 2022 after finding that its former boss had a “personal investment contract agreement” with an investor that owned 49 per cent of a company that bought an Endeavour mine.
On Wednesday, the company also reported sales of $2.1bn for 2023 and cash profits of $773mn, the latter figure down a quarter on 2022.
Impairments of $123mn knocked the bottom line, with pretax profits coming in at half of the of the previous year's figure of $507mn. The company's all-in sustaining cost outlook of around $1,000 an oz should see earnings climb in 2024 given the higher gold price.
