FTSE 100 miner says $15m of secret payments made by sacked boss

Sébastien de Montessus was fired by Endeavour in January

The sacked chief executive of London-listed Endeavour Mining was involved in $15m (£12m) of “deliberately disguised” payments made to a party based in the UAE, an investigation has found.

Sébastien de Montessus transferred the money in 2020 and 2021 to an unknown entity, according to investigators, who said they had failed in their efforts to unmask the recipient.

London-listed Endeavour Mining fired Mr Montessus in January, alleging he had made an irregular payment of $5.9m to an unknown third party in March 2021 relating to the sale of its Agbaou gold mine in the Ivory Coast.

It then called in Linklaters law firm and EY, an accountancy firm, to conduct an investigation, which revealed two previous payments in August and November 2020 that were disclosed in an update to the market on Wednesday.

Until the scandal Mr de Montessus had been credited with transforming Endeavour’s fortunes, doubling its annual output through a series of deals in west Africa, and making it one of the biggest London-listed gold miners.

He became the highest-paid chief executive in the FTSE 100 in 2021, earning $22.7m, despite Endeavour being tiny compared to other FTSE 100 firms.

Endeavour’s annual report, just published, reveals that the lawyers and accountants leading the probe were unable to find out exactly where the missing funds went.

The annual report said payments went to an entity in Ras Al Khaimah in the United Arab Emirates whose final identity was unknown.

The Financial Times has reported that Plaza Investments Ltd was the name of the Ras Al Khaimah entity to which the payment was made and that it was liquidated the day after the final $5.9m payment in March 2021.

Endeavour’s annual report said that Mr de Montessus “concealed this Agbaou payment by subsequently making false representations to management, the board and the group’s auditors over a period of more than two years that the money was still outstanding”.

In response, Mr De Montessus said he had “co-operated fully with the investigation” and was “extremely disappointed that I have once again been denied the opportunity to respond to specific allegations before they have been published”.

He added the money was “advanced to an established Endeavour contractor, Endeavour did not suffer any loss from that arrangement and it did not benefit me personally”.

Mr De Montessus said: “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’s report confirmed Mr de Montessus’ January sacking was for alleged serious misconduct and that he would be paid no bonuses for 2023 or 2024. He also lost his award of 717,400 shares in the company.

The report said Endeavour would seek to recover a $10m one-off award granted to Mr de Montessus in 2021 and a $1.5m cash bonus paid in 2022.

It added: “Part of this $11.5m will be set off against Mr de Montessus’ remaining vested 2020 long-term incentive plan (worth $8.8m based on the company’s January share price).

“He is required to repay the remainder amounting to $3.3m.”

The company said there was no evidence the secret payments were used for bribes, or that had been sent to terrorist organisations.