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ENRC hits another snag as brokers bolt

ENRC hits another snag as brokers bolt

ENRC (LON:ENRC) has been thrown into fresh disarray with reports suggesting the troubled miner’s two blue chip brokers have run for the hills.

Deutsche Bank and Morgan Stanley, which have guided the company since its arrival on the London Stock Exchange in 2007, have quit as ENRC’s brokers, according to Sky News.

The Kazakh miner is currently the subject of an investigation by the Serious Fraud Office (SFO) into allegations of corruption.

A recent boardroom bust-up led to the departure of chairman Mehmet Dalman, who was in charge of a probe into the corruption allegations. He had warned executives he would quit over issues of transparency.

His exit added to the long list of ENRC executives to call it a day in April, including its group financial controller and chief commercial officer.

Chief executive Felix Vulis said on Thursday the company is keen to get to the bottom of the allegations.

“I want to stress that ENRC is committed to a full and transparent investigation of both procedures and conduct and that we are co-operating fully in the reporting process with the SFO,” he said.

“The board is fundamentally aware of and accepts the extra scrutiny that the company faces…when all the noise and hyperbole is stripped away in the course of the investigation, we will be able to demonstrate that we have applied responsive and responsible procedures.”

ENRC is controlled by its three co-founders, who own over 14% each, plus copper producer Kazakhmys, with a 26% stake, and the government of Kazakhstan.

Last month its co-founders said they were, along with the Kazakh government, sizing up a takeover bid for the company.

Vulis responded to the bid talk by saying: “All we know now is what we knew then, that there can be no certainty that an offer will ultimately be made for ENRC, nor the terms on which any offer might be made.”

His comments come as ENRC revealed first quarter iron ore production was hit by “severe” weather.

Revenue decreased slightly against the first quarter of 2012 due to weaker commodity prices, while cost inflation was in line with guidance.

Shares slumped 5.2% to 287p each.

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