AngloGold Ashanti’s CEO was pushed to leave after shareholders asked for further investigations into a bonus payment by his former employer that he didn’t initially disclose, according to people familiar with the matter.
The mining company announced on Thursday that Kelvin Dushnisky would step down after only two years. That followed a demand from a major shareholder, South Africa’s Public Investment Corporation (PIC), for an independent probe into a payment of $926 000 from Barrick Gold, according to the people, who asked not to be identified as the details aren’t public.
The world’s third-largest gold miner hired Dushnisky from Barrick to steer a new growth path, and under his management he started to the sell mines in South Africa and Mali. AngloGold has declined 9% in Johannesburg trading since it was announced he’s leaving. The shares have risen fivefold since the CEO’s arrival as the price of gold soared.
Before starting work at AngloGold, Dushnisky agreed to a signing bonus to make up for a payment from Barrick that he would lose out on as the company wanted him to start work before year-end. When it was published in Barrick’s annual report that it did pay him the bonus, the CEO was asked by the board to repay the $800 000.
While the board had found that there was a breach of trust and a “mistake in judgment,” it didn’t take further action. After the demand for a probe by the PIC, Africa’s biggest fund manager that owns about 12% of Anglogold shares, the company then pushed for Dushnisky to resign or face a potentially damaging investigation, the people said.
“The PIC can state that it has formally written to the AngloGold board to raise its concerns” related to the payments, it said in an emailed response to Bloomberg News last month. The PIC had said it’s awaiting a “response on actions that will be taken by the company.”
The PIC didn’t immediately respond to emailed questions on Friday.
The CEO resigned to be closer to his family in Toronto, AngloGold said in an emailed response to questions on Thursday. Dushnisky didn’t respond to calls and a text message seeking comment.
Dushnisky will step down on September. 1, but will work with AngloGold from Toronto until February 28 to ensure a smooth handover, the company said. CFO Christine Ramon will be interim CEO while it searches for a replacement.