Dong’s CEO hastily dismissed

The sudden departure of Dong’s CEO raises speculation about misconduct at the company

March 13th, 2012 12:50 pm| by admin

Anders Eldrup stepped down as CEO of Dong Energy with immediate effect on Monday.

In a press release, Dong Energy stated that Eldrup’s departure would not alter the predicted earnings of Denmark’s largest energy company in 2012, nor would it change the company’s ambitions.

"Our strategy and investment program are sound, so the strategic direction will continue unchanged. We will also maintain our ambitious target to double earnings in 2015 compared with 2009,” the chairman of the board, Fritz Schur, wrote in the press release.

The announcement of Eldrup’s departure arrived after several weeks of inspection by the national audit office, Rigsrevisionen, into Dong’s books over concerns about spending at the company, which is 76 percent owned by the government.

“We have been informed that Dong has a worrying relationship to its expenses and that the company has been splashing out too much,” Regisrevisionen’s chairman Peder Larsen told Jyllands-Posten newspaper. “We do not dispute that Dong has made a lot of money. But instead of earning a profit of 4.5 billion kroner, it might have been 7.5 billion kroner if the company was more sensible with money.”

Further questions were raised over the level of severance pay that Eldrup may be in line for. Due to the sudden nature of his departure, he may be owed 33.5 months of severance pay as is stipulated in the company’s 2011 annual accounts, or approximately 17 million kroner.

No concrete reason has yet been made for Eldrup’s dismissal, though media speculation indicates there must be more than meets the eye.

“It’s very surprising and rather obvious that things like this only happen if something is very wrong,” Morten Langer, the editor of Økonomisk Ugebrev, told DR news. “No CEO wants to leave with immediate effect.”

The 63-year-old Eldrup is largely credited with transforming the partially-state owned energy company into a highly profitable enterprise after overseeing Dong Energy's creation in 2006, when six Danish energy companies were fused into one.

In 2011, the company’s revenues rose for the third consecutive year, resulting in pretax profits of over six billion kroner.

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