In a sensational discovery, Reuters found that the chairman and CEO of Chesapeake Energy Corporation (NYSE:CHK), Aubrey McClendon has intertwined his personal interests with those of the public-listed company “to a far greater degree than shareholders may realize.” Reuters reviewed a number of public records, interviews and internal Chesapeake Energy Corporation (NYSE:CHK) documents.
“McClendon has deployed a team of Chesapeake employees to handle his personal business affairs and uses the corporate jet regularly to ferry family members and friends to holiday destinations, the internal records show.
McClendon’s use of Chesapeake resources is so extensive that a special unit, informally known as “AKM Operations,” is housed on the corporate campus and employs six full-time employees and the time of scores of others to carry out accounting and engineering services,” Reuters reported.
The documents show that McClendon’s personal projects consumed $3 million of company funds along with 15,000 working hours of Chesapeake employees in 2010. Another document reviewed by the international news agency proved that the company employees did almost $3.2 million in work for McClendon, which includes repairing the hailstone damage to a house owned by McClendon.
The internal logs indicated that he took $2.25 million worth of flights in 2010 and brought the family members along. McClendon billed all the trips, including the ones to Europe and India and Bermuda, as business flights. He owns vacation properties in Bermuda.
When questioned by Reuters, the spokesman for McClendon declined to comment.
Reuters began digging into the matter after some other arrangements reported earlier demonstrated a conflict of interest between McClendon’s interests and those of Chesapeake shareholders.
“The company faces a liquidity crunch brought on by heavy borrowing and a sharp fall in natural gas prices and easing crude oil prices. That crunch is now being exacerbated by a loss of investor confidence triggered by the revelations about McClendon’s financial dealings.” Reuters said in its special report “The Lavish and Leveraged Life of Aubrey McClendon” published at 0700 EDT.