Wednesday, August 4, 2010

DE Beers CEO Gareth Penny Resigns

Gareth Penny, who served as DE Beers CEO for the past five years, has announced his resignation; the company announced Friday morning and will step down in the coming months. While a search for a successor is underway, Chief Financial Officer Stuart Brown and Chief Commercial Officer Bruce Cleaver will serve as acting joint-CEOs.

The diamond mining giant confirmed in its H1 2010 financial results released Friday morning the rumors that have been circulating in the market in the past year that Penny has turned in his resignation.

Penny's resignation took many by surprise, giving rise to immediate market speculation. IDEX Online learned that Penny discussed his resignation with senior staff Wednesday evening, expressing satisfaction with the company's return to healthy activity, yet discussing the many long hours and hard work that kept him away from his family.

A successor is yet to be named. Chief Financial Officer Stuart Brown and Chief Commercial Officer Bruce Cleaver will serve as acting joint-CEOs as the search for a new CEO is underway.

Following the announcement, Penny, 48, said this morning that the past 18 months have been an extremely challenging period for the diamond industry, for De Beers and for him personally.

"After overseeing the response to the global financial crisis and the company’s subsequent recovery, the CEO of De Beers, Gareth Penny, has advised the Board that he believes it is an appropriate time for him to step down," the company said.

The company did not provide any further explanations to the resignation. One company source told IDEX Online that Penny's intention from the beginning was to serve only five years as CEO before moving on to a new position.

Talk of a possible dissatisfaction by the board was quickly dismissed by the company.

The race for the new opening is now in full force, with many names being tossed in the air. Among the mentioned names are DTC CEO Varda Shine and Executive Director for External and Corporate Affairs Stephen Lussier, who is also a member of the Oppenheimer family. However it is understood that the search for a replacement will not be limited to internal candidates.

"The Board would like to thank Gareth for his substantial contribution to De Beers during his 22 years with the company, and wishes him every success as he pursues new opportunities."

Nicky Oppenheimer, Chairman of De Beers Group said Penny was "a passionate and effective leader during some of the most difficult challenges De Beers has faced in its long history. I have full confidence in the experienced management team that Gareth has assembled, who will carry on our current course to deliver shareholder value.”

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