Shares in Anglo-Australian mining giant BHP Billiton plunged on Monday after the company announced the surprise resignation of chief executive Brian Gilbertson after just six months in the job.
BHP Billiton, the world’s largest diversified mining company, said Gilbertson resigned with immediate effect because of ”irreconcilable differences” with the company’s directors. He was replaced by Chip Goodyear, a 44-year-old US national who joined BHP in 1999 as its chief financial officer and became chief development officer when BHP merged with Britain’s Billiton in June 2001.
BHP Billiton said in a statement that Gilbertson resigned both as chief executive and a director ”due to irreconcilable differences with the boards” of the Australian and British arms of the company.
”In order to resolve this situation and in the best interests of the company and its shareholders, Mr Gilbertson decided to resign,” it said.
In response, BHP Billiton’s share price plunged from the market’s open. It closed the session down 3,97% or 41 cents at $9,92, just a cent off it’s session low, while the broader market finished 0,65% higher at 3,075.4 points.
Salomon Smith Barney analyst Ian Maxwell said the negative market reaction reflected investor belief that ”there are some fundamental structural differences between the management and the board”.
”It’s been known for a while the dual company listing between BHP and Billiton has been going quite well but there are differences between people on the Billiton and BHP side,” Maxwell said.
”That’s been known about for some time but I don’t think anyone thought they were in any way serious.”
But a client adviser at Portfolio Partners, Howard Taylor, predicted the effect of Gilbertson’s departure on BHP Billiton will only be felt in the short term. ”Over the long term it is not going to make much difference — it’s not going to impair the value of the assets,” Taylor said.
”(The resignation) is not something anyone likes to hear and when it’s BHP everyone sits up and takes notice.”
In response to a request from the Australian Securities and Investments Commission for clarification concerning Gilbertson’s departure, the company said the resignation was ”not related to any concerns by the board about the financial performance of the group.”
In October the group reported a 9% fall in first quarter net profit to $553-million and predicted the second quarter would be just as tough.
The $57-billion dollar (US$31.9-billion) merger of Australia’s BHP and the Britain-listed Billiton was completed in June 2001. Gilbertson had been chief executive of Billiton prior to the merger and took over at BHP Billiton when former BHP chief Paul
Anderson retired as head of the merged group on July 1 last year. – Sapa-AFP