Vedanta chief set to step down for family reasons

March 30, 2017

by: Neil Hume, Commodities and Mining Editor

Vedanta Resources, the mining company controlled by Indian tycoon Anil Agarwal, has suffered a blow after chief executive Tom Albanese decided to leave so that he can spend more time with his family.

Mr Albanese told the Financial Times he would be returning to his native US when his three-year contract, which has been extended by five months, expires at the end of August.

“This is an entirely personal decision,” he said. “For the past three and half years I have been away from my family and it is now appropriate for me to spend more time with them.”

Mr Albanese, a former chief executive of Rio Tinto, is the second senior manager to decide to leave London-listed Vedanta this year.

Cynthia Carroll, a former chief executive of Anglo American who had been advising Vedanta on its aluminium business, decided not to renew her contract and left last month.

India-focused Vedanta said on Thursday that it had started the search for a new chief executive.

This month Mr Agarwal used a family trust to swoop for a 12 per cent stake in Anglo American, Vedanta’s larger rival, in a move that shocked and surprised much of the mining industry.

Mr Agarwal is the founder and largest shareholder at Vedanta, and Mr Albanese said they enjoyed a “very good relationship”.

“Vedanta is a great company that is doing some tremendous things,” he added. “The business is doing very well and is very well positioned.”

Mr Albanese is regarded by analysts as having done a good job at Vedanta since becoming chief executive in 2014, partly by improving its communication with investors.

But Mr Agarwal has been in charge of strategy and Vedanta has a complicated corporate structure that is off-putting to some investors. “Everyone knew it was Anil calling the shots at Vedanta,” said one analyst.

Vedanta said Mr Agarwal would be taking charge of a “succession process to identify candidates with the appropriate global experience” to become Vedanta’s next chief executive.

Mr Albanese left Rio in 2013 after it recorded a multibillion-dollar writedown on a coal deal in Mozambique.

However, his name has since cropped up in relation to a questionable payment made by Rio to a consultant in 2011, and which has since been reported by the company to law enforcement authorities.

In November, the FT reported that emails from 2011 showed that Mr Albanese, then chief executive, and Sam Walsh, then head of iron ore, debated a request to pay $10.5m to French consultant François Polge de Combret for work to help secure the company’s mining rights to a large iron ore project in Guinea.

Rio said in November that after launching an internal inquiry, it had notified the US Department of Justice and the UK’s Serious Fraud Office about the payment.

Mr Albanese declined to comment on the matter. Mr Walsh said this month that he believed he had “always acted lawfully” during his time at Rio.