* CEO Eric Olsen resigns, effective July 15
* Internal investigation finds payments were made in Syria
* Board finds CEO Olsen not responsible for any wrongdoing
(Adds comment from security manager, details, background)
By John Revill and Oliver Hirt
ZURICH, April 24 LafargeHolcim Chief
Executive Eric Olsen will leave the company in July after the
world's largest cement maker admitted on Monday it had paid
armed groups to keep a factory operating in war-ravaged Syria.
An independent internal inquiry found protection payments
made to intermediaries to keep open the Jalabiya plant in
northern Syria were not in line with its policies.
"Significant errors of judgment were made that contravened
the applicable code of conduct," the company said, while adding
that Olsen was not responsible for any wrongdoing identified in
Olsen, who has headed the company since it was created by a
merger two years ago, said he was resigning with effect from
"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," Olsen, who has dual French and American
nationality, said in a statement.
French prosecutors are also investigating the group's
activities in Syria. Two human rights group have filed a legal
complaint in Paris against Lafarge, saying some of its work in
Syria may have made it complicit in financing Islamic State and
in war crimes.
Olsen's resignation highlights the dilemmas companies face
when working in conflict zones.
The report noted the chaos in Syria between 2013 and the
evacuation of the plant in September 2014. It added that local
managers believed they were acting in the best interests of the
company and its staff by trying to keep the plant open.
"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," the report said.
The plant cost $680 million to build and had started
production only in May 2010.
Formed by a $44 billion merger, LafargeHolcim said it would
tighten its corporate governance to focus more on
country-specific risks and sanctions policies.
LafargeHolcim shares dipped after news of Olsen's departure
was confirmed, one of the few losers in a Paris market buoyed by
the outcome of the first round of the presidential election. In
Switzerland, the dual-listed stock recovered ground lost in
early moves to trade flat by 1030 GMT.
Once Olsen goes, Chairman Beat Hess will take over as
interim CEO. Hess is Swiss and had served as a director of
Holcim since 2010.
Last month LafargeHolcim said Bruno Lafont, the former
Lafarge CEO, would also step down as co-chairman.
Olsen himself was a former head of human resources at
Lafarge before being named executive vice-president operations
in September 2013. He was paid nearly 9 million Swiss francs ($9
million) last year.
Jacob Waerness, a risk manager for Lafarge in Syria from
2011 to 2013, said the plant should have closed down in the
summer of 2013 when the company became aware of radical Islamist
groups in the region.
"Quite early, in 2011 we discussed if an armed group
occupies the area around the cement plant, we have to leave,"
Waerness said earlier this month at an event in Zurich to
promote a book he wrote about his experiences. The Norwegian
security consultant no longer works for the company.
However, he said that a Kurdish militia and the Syrian
government had both wanted the plant to remain open, prompting
local officials to try to keep it going.
"We were not breaching any sanctions. We were a Syrian
company - we had a responsibility to operate," he said.
($1 = 0.9953 Swiss francs)
(Additional reporting by Terje Solsvik in Oslo; Editing by