LONDON, Aug 18 (Reuters) - Kazakh miner ENRC will need to bring robust independent voices onto its board to remain attractive for minority shareholders if one of its founders decides to seek a more active role as director, analysts and investors said.
A Financial Times report on Thursday said Alexander Mashkevitch, one of the founders of the London-listed group, could be considered for a board role as part of a long-awaited review of the miner's governance and board.
The move follows the settlement of a long-running case in Belgium, which one source familiar with the company told Reuters had been a factor holding back Mashkevitch and the other founders from closer involvement with ENRC management.
A spokesman for the Brussels prosecutor said the case against the three founders was settled at the end of June after they agreed to pay an undisclosed fine.
"The big issue here is the independent directors, and whether they will stand up for minority shareholders," analyst Nik Stanojevic at Brewin Dolphin said.
"What is on everyone's minds is that there were some executives who may have done just that but were then sacked. A founder coming onto the board is neither here nor there -- it is about independent directors sticking up for minority shareholders."
Minority shareholders currently own less than 20 percent of the mining group.
ENRC's image has been battered by the purchase of a Congolese asset expropriated from rival First Quantum last year and a damaging boardroom spat months later. It is currently carrying out a review of its governance, including the board's size and composition.
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The boardroom row, caused in part by differences between the founders and directors, culminated in June with the three founders, who own just under 44 percent of shares, voting out two well-known independent directors. The firm subsequently started the governance review, which concludes next month.
Mashkevitch has also been named as a possible candidate for the chairman's role. Current Chairman Johannes Sittard is widely expected to leave as a result of the review.
"It's a difficult situation because you could run into a Rupert Murdoch-type scenario where you have the powerful shareholder who is chairman, and therefore how can the minority shareholders be confident that their interests are being protected," one institutional investor said.
Mashkevitch has not held a formal role in ENRC since it went public, partly because of the Belgian case.
While the case, which involved allegations of money laundering and forgery, was settled, the men made no formal admission of guilt.
Analysts and investors also said, however, that Mashkevitch's presence on the board could serve to clarify and formalise the role of the company's largest shareholders.
"The issue with ENRC is that they've had these powerful shareholders who aren't on the board, but have been perceived as influencing the strategy of the company. To give it a term, it's back-seat driving," the investor said.
"I would prefer to see the individuals who are actually influencing what the company does sitting on the board."
Mashkevitch said in June that he had considered the chairman's role earlier this year but decided not to, on the basis that it would not achieve "my aim of resolving problems that lay in (the board's) structure and composition."
"The founders need to be represented on the board in one way or another, and with (Mashkevitch) being on the board, it is very clear who he is representing," analyst Gavin Wood at Arbuthnot in London said.
ENRC declined to comment. (Reporting by Clara Ferreira-Marques and Chris Vellacott in London and Ben Deighton in Brussels; Editing by Hans-Juergen Peters)
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