LafargeHolcim’s chief executive is to step down following an internal investigation into a plant the Swiss-French cement company operated in Syria until September 2014.
Eric Olsen’s departure makes him the highest-profile casualty of the controversy surrounding a Lafarge cement plant that the company kept running as Syria descended into civil war. Human rights groups have alleged the company helped finance terrorism.
“While I was absolutely not involved in, nor even aware of, any wrongdoing I believe my departure will contribute to bringing back serenity to a company that has been exposed for months on this case,” Mr Olsen said on Monday morning.
The group said he would leave on July 15, two years after becoming chief executive and taking responsibility for implementing the €41bn merger between the French company Lafarge and its Swiss rival Holcim in 2015.
Beat Hess, chairman, will take over as interim chief executive until a successor is found.
The investigation looked into the operations of the Jalabiya plant in Syria as the country’s civil war intensified in 2013 until it was evacuated in September 2014.
LafargeHolcim said the report had confirmed initial conclusions “that a number of measures taken to continue safe operations at the Syrian plant were unacceptable, and significant errors of judgment were made that contravened the applicable code of conduct”.
It added: “The findings also confirm that, although these measures were instigated by local and regional management, selected members of group management were aware of circumstances indicating that violations of Lafarge’s established standards of business conduct had taken place.”
However, the company said Mr Olsen “was not responsible for, nor thought to be aware of, any wrongdoings that have been identified as part of its review”.
Mr Olsen was not directly responsible for the operations in Syria, but while the plant was running he was a senior manager in charge of operations at Lafarge.
LafargeHolcim said a range of measures would be taken to strengthen controls to prevent a repeat of the incident, but because of legal proceedings in France, it would not comment further on the findings or on the conduct of individuals.
Paris prosecutors have opened a preliminary inquiry into alleged dealings between LafargeHolcim and sanctioned groups in Syria following a complaint by the French finance ministry.
Human rights groups in France have filed a lawsuit and have alleged that the company had “business relations” with militant group Isis and may have taken part in financing the group.
Mr Olsen’s exit is another blow for the cement company. Last year its chairman stepped down and the group is under pressure to deliver an ambitious integration programme promised at the time of the 2015 merger against a backdrop of weak global markets.
Under Mr Olsen’s leadership, LafargeHolcim has implemented a substantial disposal programme and sought to bridge cultural differences between the former Lafarge and Holcim parts of the business.
LafargeHolcim’s initial probe into the Syria plant revealed that “the local company provided funds to third parties to work out arrangements with a number of . . . armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant. The investigation could not establish with certainty the ultimate recipients of funds beyond those third parties engaged.”
The internal investigation has been conducted with law firms Baker McKenzie in Washington and Darrois Villey in Paris.
Paris prosecutors have opened a preliminary inquiry into alleged dealings between Lafarge and sanctioned groups in Syria following a complaint by the French finance ministry.
LafargeHolcim reported net sales of SFr26.9bn ($27.1bn) in 2016, a fall of 1.7 per cent on the previous year on a like-for-like basis. Operating earnings before interest, tax, depreciation and amortisation were up 22 per cent at SFr5.2bn.