Gilbertson quits Vedanta for $50m Russian job

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The Independent Online

Brian Gilbertson, the mining executive with the midas touch for his own bank account, has walked away from another company after enjoying a bumper pay-day.

Brian Gilbertson, the mining executive with the midas touch for his own bank account, has walked away from another company after enjoying a bumper pay-day.

Mr Gilbertson decided yesterday to leave Vedanta, a London-listed Indian mining group, having enjoyed a £7m award of shares in the company during his seven-month stay as chairman. Vedanta's shares are down by a third since it listed in December.

Vedanta's chief executive and founder, Anil Agarwal, who gave Mr Gilbertson the shares from his personal holding to bring him on board before the company's flotation in December, was said to be furious that his chairman was not willing to give up an involvement with a rival metals group. Mr Gilbertson chose instead to opt for a position with the Russian metals producer Sual, which promises him riches that would eclipse even his previous payouts. It is rumoured he will get a $50m package from Sual, which also hopes to list in London. He is currently negotiating an executive position with the company.

Charles Kernot, the director of mining at the broker Seymour Pierce, said: "Western investors would potentially be happier seeing someone of Gilbertson's history rather than someone who is an unknown quantity. People think he will add credibility to their ventures and are willing to pay for it."

Sual could be worth up to £2bn. But given recent events in Russia, which have seen the country's biggest oil company, Yukos, brought to the brink of bankruptcy by government action, foreign investors will be jittery about political risk, analysts said.

Mr Gilbertson's reputation for being exceptionally well paid was cemented through his role as the architect of the 2001 merger between Billiton, which he ran, and Australia's BHP. That deal created the world's biggest natural resources group.

Even though Mr Gilbertson promoted the deal, a change of control clause in his contract triggered a £2.5m payment, despite the fact he continued as chief executive of the merged company for six months.

BHP's chief executive, Paul Anderson, initially ran the combined company but under the arrangement, Mr Gilbertson took over when he left - which happened one year later. Just six months after becoming group chief executive of BHP Billiton, Mr Gilbertson stunned the City by quitting in May 2003. The company cited "irreconcilable differences" between Mr Gilbertson and the board. His pay-off topped £4m, and this was on top of £3m pay and bonus for his time as chief executive, plus a £600,000 a year pension.

Yesterday, Vedanta was being diplomatic about Mr Gilbertson's departure, describing it as "mutually agreed". His replacement, Michael Fowle, said Mr Gilbertson's departure was "disappointing" but the Vedanta board had made clear that it saw a conflict of interest between holding positions at both Vedanta and Sual.

"He told us a while ago that he had a relationship with Sual. We asked him to give it up. When he told us he wanted to continue with Sual [on Monday], he already knew our position on the subject," Mr Fowle said.

Although Vedanta and Sual are not in direct competition today, they are both metals companies and are both aluminium producers. It is thought Mr Gilbertson left BHP Billiton when he became frustrated his board would not support further acquisitions. Industry sources speculated yesterday that, aside from the lure of Sual's pay package, Mr Gilbertson may have wanted the challenge of an executive role at a new company.

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