Chesapeake CEO cleared of intentional wrongdoing
NEW YORK — An investigation by Chesapeake Energy Corp.'s board of directors into outgoing CEO Aubrey McClendon's personal financing deals with company partners has found the deals did not benefit McClendon improperly or cost the company more.
The company said on Wednesday that “no intentional misconduct by Mr. McClendon or any of the company's management was found.”
McClendon, who founded Chesapeake in 1989 and oversaw it becoming the second- largest natural gas producer in the United States, had a special arrangement with the company that allowed him to invest personally in the oil and gas wells the company drilled.
As the company expanded and oil and gas prices fluctuated, McClendon needed to borrow money to pay for his stakes in the wells and he used those stakes as collateral to do so.
Last spring, Reuters reported that McClendon received loans of $1.4 billion from an investment firm called EIG Global Energy Partners that was negotiating a separate oil and gas deal with Chesapeake.
The probe sought to discover if McClendon, who was then chairman and CEO of Chesapeake, received a special deal from EIG and in return sold the company's assets at lower-than-market value. The probe also looked further back into similar deals McClendon may have struck.
“The review of the financing arrangements did not reveal any improper benefit to Mr. McClendon or increased cost to the company as a result of the overlap in the financial relationships,” the company said.
Chesapeake said McClendon had no comment on the findings.
McClendon was stripped of his role as board chairman in May. Last month, Chesapeake announced McClendon would leave the company April 1 amid philosophical differences.