The resignation suggested Swiss cement giant LafargeHolcim continues to deal with the fallout from its decision to do business with U.N.-designated terror groups
GENEVA—The top executive of LafargeHolcim will resign, citing “strong tensions” facing the Swiss-French cement maker since its admission last month that it had struck deals with armed groups in Syria—allegedly including the radical Islamic State group.
The world’s largest cement maker said an internal investigation has concluded that CEO Eric Olsen was not responsible for or aware of any wrongdoing linked to now-discontinued Syria operations. LafargeHolcim announced the internal probe last month as it acknowledged having funneled money to armed groups in 2013 and 2014 to guarantee safe passage for employees and supply its multimillion-dollar plant there.
LafargeHolcim said the review turned up failings in its internal compliance program and other controls, and said its board has mandated Olsen and his team to “implement remedial measures” before he leaves on July 15.
The company’s activities with the armed groups came despite international sanctions against the Islamic State group and the al-Qaida-linked Nusra Front, which are U.N.-designated terror groups. The company has refused to specify the “local armed groups” it funded other than to say it involved “sanctioned” groups. However, French NGO Sherpa has filed a complaint accusing the company of doing business with Islamic State.
The resignation suggested the company continues to be dealing with the fallout from its decisions to do business with the armed groups.
“My decision is driven by my conviction that it will contribute to addressing strong tensions that have recently arisen around the Syria case,” Olsen said of his resignation plans. “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.”
The internal investigation, which has now been completed, in essence pointed to the company’s efforts to salvage a Syria plant that cost some $680 million to build over three years and “was one of the only sources of meaningful employment for the surrounding communities,” according to a company statement. After pulling out international staff in 2012, the plant was fully evacuated and stopped operating in September 2014.
The wrongdoing centres on activities at France’s Lafarge before it merged with Swiss company Holcim in 2015 to create LafargeHolcim, which has some 90,000 employees in over 80 countries worldwide.