About a year ago, a French foreign minister tipped off authorities about Swiss-French cement giant, Holcim-Lafarge, in regards to their activities in Syria. It was alleged, and then proven, that managers in their Syrian plant were ‘paying off’ terror groups in order to stay in business, continuing to supply groups in Syria with the much needed concrete that was being used to rebuild after the destruction of war demanded it.
Human rights groups, led by Sherpa and 11 former employees of Lafarge in Syria, filed suit to hold the world’s largest producer of concrete accountable.
“It appears from the investigation that the local company provided funds to third parties to work out arrangements with a number of these armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant. In hindsight, the measures required to continue operations at the plant were unacceptable…the investigation revealed significant errors of judgment that are inconsistent with the applicable code of conduct.”
The CEO of Holcim, Eric Olsen, announced he’d be stepping down today, not because he did anything wrong, but to bring ‘serenity’ to the wholesome Swiss-French company.
In a statement, Mr. Olsen said he was “driven by my conviction that it will contribute to addressing strong tensions that have recently arisen around the Syria case”.
“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,” he added.
The Syrian factory in question was started in 2010, costing $680m. It stopped operating in 2014, after work in the region became untenable, due to the war.
In Holcim’s internal report on the matter, they said “very simply, chaos reigned and it was the task of local management to ensure that the intermediaries did whatever was necessary to secure its supply chain and the free movement of its employees.”
Holcim’s stock peaked in June of 2014 at 78.9 chf, right around the time they closed down the Syrian plant. Shares are now trading in the mid 50s.