LafargeHolcim CEO to step down over Syria controversy: FT
- Author: Zachary Reyes Apr 24, 2017,
Apr 24, 2017, 22:33
French-Swiss cement maker LafargeHolcim has announced the resignation of CEO Eric Olsen following an internal investigation into the company's activity in Syria before September 2014. "I believe my departure will contribute to bringing back serenity to a company that has been exposed for months on this case", he said.
LafargeHolcim was formed in 2015 by the merger of the French Lafarge company and its Swiss rival Holcim and now has its headquarters in Switzerland.
LafargeHolcim did not say how much money was paid to armed groups, and it declined to name the groups that received funds.
Still, Olsen said he was resigning from the company, effective from July 15.
The review examined allegations that company personnel had struck deals with armed groups and sanctioned parties during 2013 until the plant closed in September 2014.
Lafarge North America, which is part of Lafarge Holcim, operates a cement plant in Whitehall Township. Lafarge is suspected of sourcing oil locally to operate the factory in defiance of a 2012 European Union ban on purchases of Syrian oil as part of a sanctions package targeting the regime of Syrian President Bashar al-Assad.
The company's activities with the armed groups came despite worldwide sanctions against the Islamic State group and the al-Qaida-linked Nusra Front, which are United Nations -designated terror groups. LafargeHolcim is expected to announce the findings of its internal investigation shortly. It said it had started a search for a successor.
LafargeHolcim chairman Beat Hess will temporarily take over the reins of the company.
An independent internal inquiry found protection payments made to intermediaries to keep open the Jalabiya plant in northern Syria were not in line with its policies.
LafargeHolcim's investigation found that though these measures were instigated by local and regional management, some members of group management were aware of the situation, indicating Lafarge's code of business conduct had been violated.
"In our view, it is extremely disappointing that Eric Olsen has to leave at a time when the company is gaining traction and delivering on targeted synergies", said analysts at Vontobel. But, he said, his departure "highlights that especially companies being active in politically challenging regions such as Syria have to follow strict code of standard practices".