Alleged war crimes fail to disqualify Lundin Energy directors
There’s a list of reasons a corporate director might get in trouble with their investors. Missing too many board meetings. Approving outlandish pay. Overseeing disastrous business strategy.
At the time of the indictment, the company said Ian Lundin would not stand for re-election as chairman of the board – but reversed course this spring. Lundin Energy, previously known both as Lundin Oil and Lundin Petroleum, operated in southern Sudan from 1997 to 2003. It led a consortium with three other companies before exiting the country in an asset sale. During that time, the Sudanese government was in a bloody fight with rebels, and human-rights organizations say oil exploration exacerbated a war in which tens of thousands were killed and hundreds of thousands displaced.
Reuters has reported that Swedish prosecutors said when they indicted Ian Lundin and Mr. Schneiter that Lundin Energy had asked the Sudanese government to secure a potential oilfield, knowing this would mean Sudanese forces would seize the area. This made the executives complicit in war crimes that were then carried out by the Sudanese army and allied militia against civilians, the prosecutors allege.
In a lengthy explication of why it reversed course, the nominating committee of Lundin Energy’s board acknowledged the reputational risk, but said the company and the two directors’ defence lawyers “are of the view that it is not possible to conclude that any representative of the company, either directly or indirectly, was complicit in encouraging anyone to commit crimes against international law – let alone that any perpetrator as a result of such encouragement would have committed any such...
The argument for re-electing the two men wasn’t good enough for proxy adviser Glass Lewis & Co., which recommended that shareholders vote against their reappointment this year. “While the charges ... have yet to be brought to trial, we believe that a replacement of these directors is in shareholders’ best interests,” Glass Lewis said.