London Briefing: More big-game drama for Murray with pursuit by angry institutional investors

Gulf Keystone chairman Simon Murray has failed to appease institutions

The man who was pursued by a leopard and lived to tell the tale is once again at the centre of a City row, this time over pay and corporate governance standards at the oil exploration group Gulf Keystone.

Best described as colourful, septuagenarian Simon Murray first came to the City's attention a couple of years ago, when he was appointed chairman of the controversial commodities trading group Glencore.

A former French foreign legionnaire, polar explorer and all-round adventurer, Murray captivated Glencore followers with his now infamous comment in response to reports he had been shortlisted to head the commodities group: “This is very exciting, but you are talking to someone who has been chased by a leopard.”

Admiration swiftly turned to embarrassment, however, as Murray aired his views on women in the workplace. He said he was reluctant to hire women because “pregnant ladies take nine months off”. Although he thought they were “quite as intelligent as men” he felt women lacked ambition in business because “they like bringing up their children and all sorts of other things”.


His comments caused considerable offence in the Square Mile and beyond. Business secretary Vince Cable waded into the row, which threatened to overshadow the long-awaited Glencore float. Murray went into purdah for the duration of the IPO process and survived the episode, although he departed after failing to get the top job when Glencore merged with Xstrata.

Angry mob of shareholders
Now the 73-year-old finds himself being chased by a mob of angry institutional shareholders in Gulf Keystone, the London-listed, Kurdistan- focused oil explorer which installed Murray as chairman just a few weeks ago.

Murray's appointment was designed to appease shareholders, particularly the powerful M&G, who were unhappy that the company's Texan chief executive Todd Kozel held the dual positions of chairman and chief executive, which flies in the face of corporate governance guidelines.

But splitting the two top roles has failed to assuage investors, who are also unhappy at the level of pay in the boardroom. For example, Kozel was rewarded with a pay and bonus package of more than £10 million last year, despite the company racking up losses of more than £50 million. This makes him one of the country’s highest-paid executives, even through Gulf, which trades on the junior AIM market, is a relative minnow.

The company, which is sitting on a huge oil find in the Kurdistan region of Iraq, is planning a move to the main market, however, a transfer that will put its governance shortcomings under an even more unforgiving spotlight. Leading the protests against the board is the mighty M&G along with City heavyweight Capital Group, which together hold around 10 per cent of Gulf's shares.

Unusually for City institutions, they have gone public with their disapproval of the way Gulf is being run and plan to bring matters to a head at its annual meeting at the end of the month. M&G is insisting that independent directors are brought in and has proposed four of its own candidates, including one former board member. The institution insists it does not want to interfere with the company’s operations, but merely wants to ensure that shareholder interests are represented.

Gulf is urging shareholders to vote against the M&G proposals, saying it is searching for its own non-executive directors and that Murray plans to call in remuneration experts to overhaul boardroom pay. Murray is also due to take over as head of Gulf’s remuneration committee.

'Needs adult supervision'
Capital hasn't said much but what it has said so far is scathing – that Kozel "needs adult supervision". The company "needs to be run for the shareholders, not the management", said Capital's Mark Denning.

The spat at Gulf comes in the wake of high-profile problems at a number of other commodity and exploration companies with London listings, such as the scandal-hit Eurasian Natural Resources Company, which is being investigated by the Serious Fraud Office, and Bumi, which is the subject of a tangled power struggle.

Companies with overseas interests and a limited shareholder base have been attracted to the London market because its listing requirements are less stringent than others’, but the recent scandals have prompted calls for the regulations to be tightened.

For Gulf, the showdown will come at its annual meeting at the end of this month. As befits a company with questionable governance standards, it's holding the meeting in Bermuda, making it tricky to attend for the army of small shareholders who bought in when it was a penny stock. The institutions will not be so easily deterred.

Fiona Walsh is business editor of