Former Endeavour Mining CEO diverted $20.9m to UAE

Sébastien de Montessus, former CEO, Endeavour Mining

THE former CEO of Endeavour Mining Sébastien de Montessus diverted $20.9m from the company to an unknown entity in the United Arab Emirates (UAE) between 2020 and 2021, the West African gold miner said on Wednesday.

This is one of several findings of an investigation into De Montessus who was fired from the company for an illicit $5.9m payment to a third party in January. The investigation found that an additional $15m was diverted in two payments to the UAE company in 2020.

Endeavour said there was no evidence of bribery or that De Montessus’ had paid the monies to a sanctioned company, yet it was unable to identify the ultimate beneficiaries in third party which was incorporated as an offshore entity in UAE’s Ras al Khaimah. The company was liquidated on receipt of the final $5.9m payment, said Endeavour.

The miner said it was unnecessary to restate its financial numbers and there was no evidence other receiveables written off by the company to the end of its 2023 financial year related to De Montessus. Endeavour said it considered its investigation closed. Srinivasan Venkatakrishnan, Endeavour chairman, declared the matter was “behind us”.

According to the investigation, De Montessus diverted $5.9m related to the sale of Endeavour’s Agbaou mine to a third party in March 2021 and then concealed the payment by making false representations to the board by saying it was an outstanding receivable. But in August and November 2020 two payments totalling $15m had also been paid.

These earlier payments were disguised as advance payments to a contractor through “repeated false representations”.

De Montessus attended two interviews during the investigation in which he “… continued to attempt to conceal his motives and actions relating to the events being investigated by providing untrue and misleading explanations for his conduct”, said Endeavour.

De Montessus has argued the $5.9m in 2021 was used to pay for security equipment to protect the group’s partners and employees in a conflict zone. Endeavour dismissed his explanation as “implausible and untrue”.

Responding to Endeavour’s statement today De Montessus said he was “extremely disappointed” to be denied the opportunity to respond to specific allegations prior to their publication.

Said De Montessus: “$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”.

De Montessus said he would consider his next steps.

Endeavour, now led by former Gold Fields CEO Ian Cockerill, said it was examining its overall control environment, including the impact of “tone at the top”. Crucially it said there was “no material weaknesses” in its financial controls or disclosure procedures.

“The board has reserved its position regarding the possibility of pursuing Mr de Montessus for recovery of amounts lost by the group as a result of his actions,” it said. As per an announcement on January 18, the group had implemented a clawback of remuneration to De Montessus of $29.1m.

Endeavour was commenting on its investigation on the same day it announced adjusted net earnings of $230m for the year ended December 31, representing a 22% year-on-year decline.