Franco-Swiss building-materials company LafargeHolcim Ltd. said Monday that Chief Executive Eric Olsen will step down on July 15 despite an internal review that cleared him of any wrongdoing regarding payments the company made to armed groups in Syria to ensure staff safety.
In a statement, Mr. Olsen said his decision to resign "is driven by my conviction that it will contribute to addressing strong tensions that have recently arisen around the Syria case."
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"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," he said.
His departure removes uncertainty over the Syria controversy that has dogged the company, which is still dealing with the integration of Holcim and Lafarge since the companies merged less than two years ago. The company's shares were 1% higher at 0730 GMT, as European markets rallied in the wake of the first-round results in France's presidential elections.
Last month, LafargeHolcim disclosed the initial findings of an internal review of the company's operations in Syria in 2013 and 2014 related to alleged dealings with some armed groups to ensure the safety of plant employees.
"It appears from the investigation that the local company provided funds to third parties to work out arrangements with a number of these armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant, " LafargeHolcim said at the time.
On Monday, the company said "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."
"Following an in-depth review, the board has concluded that Eric Olsen was not responsible for, nor thought to be aware of, any wrongdoings that have been identified as part of its review," LafargeHolcim said.
Mr. Olsen, a dual French-American national, has been CEO since France's Lafarge and Switzerland's Holcim merged in 2015. Before that, he served in a variety of executive roles at Lafarge and was executive vice president of operations from 2013.
Last month, LafargeHolcim said the Syria allegations weren't expected to have a material financial effect. It posted a net profit of 1.79 billion Swiss francs ($1.8 billion) in the year to Dec. 31, a turnaround from a pro forma net loss of 2.12 billion francs the previous year.
"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.
LafargeHolcim also came under criticism in France last month over comments Mr. Olsen made that signaled the company's willingness to supply cement for a border wall with Mexico that U.S. President Donald Trump has proposed building.
A search for Mr. Olsen's successor will begin immediately, the company said, and board chairman Beat Hess will serve as interim CEO after Mr. Olsen departs.
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(END) Dow Jones Newswires
April 24, 2017 04:20 ET (08:20 GMT)