CAIRN ENERGY has been thrown into fresh upheaval following the departure of a further two key executives, including chief financial officer Jann Brown, just weeks after founder Sir Bill Gammell said he would step down as chairman of the Scottish oil explorer.
Brown, who joined Cairn in 1998 and was named CFO in 2006, will step down alongside deputy CEO Mike Watts after the company’s annual general meeting next month. The company said they will stand down because of “long term succession planning”.
The departures also come amid the uncertainty of an unresolved tax dispute with the Indian regulator.
Shares in FTSE 250 business took a hit last month after it suspended its share buy-back programme while it deals with the dispute.
The Edinburgh-based company reported a pre-tax loss of $1.1bn (£660m) and revealed that it would be halting its $300m share buy-back programme while an investigation by the Indian tax authorities into its operations takes place.
The Indian tax regulator had contacted Cairn in January for information about a group reorganisation that took place in 2006. According to Cairn, which denies any wrongdoing, the reorganisation was compliant with tax legislation in place at the time in each relevant jurisdiction, including India.
Both Watts and Brown have agreed, during their notice periods, to continue in senior roles and dedicate their time to seeking to resolve the tax position in India, Cairn said.
James Smith, who joined Cairn recently from Rothschild where he was a director in the Energy & Power team in London, will take over the role of finance director and will join the board with effect from the conclusion of the AGM.
He has 14 years’ experience in investment banking, advising oil and gas clients, including Cairn, on M&A transactions and equity and debt market finance.
Simon Thomson, Cairn CEO said: “I would like to thank Mike and Jann, both for their instrumental contribution to the growth of Cairn over the years and for agreeing to remain in their new roles seeking a resolution of the Indian tax matter.
“The changes announced today offer the best way of organising our business for the future – both in delivering our ongoing balanced growth strategy and in dealing with the situation in India.”
Brown, who is joining multinational oil and gas company Wood Group as its audit committee chairwoman, will see her base salary cut by £75,000 to £362,675 during her notice period.