×

UPDATE 1-ENRC to consider strengthening chairman's hand-source

* Board to consider proposal for executive, full-time chairman

* Proposed change supported by chief executive-source * ENRC battling tarnished corporate governance reputation (Adds details, background) By Clara Ferreira-Marques

LONDON, Oct 9 (Reuters) - Kazakh miner ENRC , battling to shake off a reputation tainted by a corporate governance storm last year, could beef up the role of its chairman as part of efforts to overhaul the group, a source familiar with the matter said.

Under a proposal to be put to the board, the position of banker Mehmet Dalman would be strengthened by making him a full-time, executive chairman, the source said.

It was not clear when the board would consider the change, but a decision could come within days, the source said.

Under Dalman, a former investment banker and independent director on the miner's board who became chairman earlier this year, ENRC has promised a simpler and more transparent structure, and is pushing ahead with internal investigations into whistleblower allegations of corruption.

The group, which is controlled by its founders, has already completed a probe into allegations around its Kazakh business and has presented the results verbally to UK regulators.

It is still working on a separate probe into its international business. This could is expected to include copper deals in Congo which have attracted criticism from transparency and anti-corruption campaigners.

The source said the change was supported by Chief Executive Felix Vulis.

It is unclear, however, how the strengthened chairman's role would change the working relationship between Dalman and Vulis, and what responsibilities Dalman could take on, at the expense of his chief executive.

Vulis has been expected to be left to focus on operational matters, with Dalman taking on issues like compliance and concentrating on the broader company overhaul.

Vulis stepped down from the chief executive's role early last year over what sources familiar with the matter said later was a disagreement with the then-chairman, Dalman's predecessor.

Following a governance review later in the year, he agreed to stay in the role and the chairman was replaced.

The proposed change to Dalman's role, likely to revive debate over governance at ENRC, has already attracted criticism.

Board member Paul Judge said in an email leaked to the Daily Telegraph newspaper on Tuesday that debating the change at a Friday board meeting at which neither he nor Vulis were present "smacks more of a lynch mob than of proper governance".

ENRC declined to comment.

(Reporting by Clara Ferreira-Marques; Editing by Sinead Cruise and David Cowell)

((clara.ferreira-marques@thomsonreuters.com)(+44 207 542 3214)(Reuters Messaging: clara.ferreira-marques.thomsonreuters.com@reuters.net))

Keywords: ENRC/