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Lundin Norge headquarters in Lysaker, Norway, on June 2, 2017.Ints Kalnins/Reuters

There’s a list of reasons a corporate director might get in trouble with their investors. Missing too many board meetings. Approving outlandish pay. Overseeing disastrous business strategy.

One thing we apparently cannot add in one particular instance, however, is getting indicted on charges of being complicit in war crimes.

Ian Lundin and colleague Alex Schneiter were re-elected to the board of Sweden’s Lundin Energy LNEGY at a shareholders’ meeting in late March, even though the Swedish Prosecution Authority charged them with complicity in war crimes last November in relation to the company’s operations in Sudan from 1999 to 2003. The two men are former top executives of Lundin.

At the time of the indictment, the company said Ian Lundin would not stand for re-election as chairman of the board – but reversed course this spring.

The charges have not been proven in court, and we’ll get into the prosecutors’ allegations, and the company’s strong disputation of them, in a moment. But first, a bit about why we will examine this in Canada’s national newspaper: Lundin Energy is part of the Lundin family of companies, which includes five public companies listed on Canadian stock exchanges. And high-profile Lundin Energy official Lukas Lundin, sits on all five of those boards – as well as the Lundin Energy board that blessed the re-nomination of Ian Lundin and Mr. Schneiter. Lukas Lundin, who is Ian’s brother and a former British Columbia resident, is not accused of involvement in any crime.

The situation at Lundin Energy is a reminder of the business, and human-rights, approach of the Lundin patriarch, Adolf, who was willing to invest in apartheid-era South Africa and negotiate with Zaire’s dictator, Mobutu Sese Seko. The best way to tap new resources and make money in that sector, Mr. Lundin said, is by partnering with countries and leaders who others avoid – for what many people would find to be perfectly good reasons.

Lundin Energy, previously known both as Lundin Oil and Lundin Petroleum, operated in southern Sudan from 1997 to 2003. It led a consortium with three other companies before exiting the country in an asset sale. During that time, the Sudanese government was in a bloody fight with rebels, and human-rights organizations say oil exploration exacerbated a war in which tens of thousands were killed and hundreds of thousands displaced.

The advocacy group Human Rights Watch alleged in a report on Sudan in 2003 that after rebels attacked the company’s drill site in May, 1999, Lundin evacuated its workers and idled operations until “after the government and its militia had attacked, burned out, and displaced many thousands ... living” in the area. Human Rights Watch said in the report that Lundin suspended operations again in January, 2002, resuming only after another government operation resulted “in more massive displacement and civilian casualties.”

Human-rights advocates say Lundin knew well of the violence surrounding its property – Human Rights Watch called it “willfully blind” – and for years, suggested the Swedish government investigate the company.

Reuters has reported that Swedish prosecutors said when they indicted Ian Lundin and Mr. Schneiter that Lundin Energy had asked the Sudanese government to secure a potential oilfield, knowing this would mean Sudanese forces would seize the area. This made the executives complicit in war crimes that were then carried out by the Sudanese army and allied militia against civilians, the prosecutors allege.

The company has denied allegations of misconduct for more than two decades. On a website dedicated to the case, Lundin Energy says: “In the company’s firm opinion, there is no evidence linking any representative to the alleged primary crimes. The company is firmly convinced that it was a positive force for development in Sudan and operated there responsibly, as part of an international consortium, and in full alignment with the policy of constructive engagement endorsed by the UN, EU and Sweden at the time.”

Still, the indictment was a bad look. So the company said Ian Lundin would not stand for re-election as a director this spring.

In a lengthy explication of why it reversed course, the nominating committee of Lundin Energy’s board acknowledged the reputational risk, but said the company and the two directors’ defence lawyers “are of the view that it is not possible to conclude that any representative of the company, either directly or indirectly, was complicit in encouraging anyone to commit crimes against international law – let alone that any perpetrator as a result of such encouragement would have committed any such crimes.”

Lundin Energy plans to merge its oil and gas assets with Norwegian company Aker BP later this year, and the nominating committee said “there is significant value in retaining” the board members, including Ian Lundin and Mr. Schneiter, “for continuity reasons, to oversee the completion process of the combination proposal.”

Ian Lundin and Mr. Schneiter are not slated to stay on the board of the slimmed-down, renewables-focused Lundin Energy in June, according to Lundin companies spokesperson Robert Eriksson. He also said Lukas Lundin – who is not involved in the Sudan legal case – will not stand for re-election for any of the boards of the five Canadian companies because he is battling cancer.

The argument for re-electing the two men wasn’t good enough for proxy adviser Glass Lewis & Co., which recommended that shareholders vote against their reappointment this year. “While the charges ... have yet to be brought to trial, we believe that a replacement of these directors is in shareholders’ best interests,” Glass Lewis said. “In our view, their continued presence on the board has the potential to act as a significant impediment to the board in independently conducting its oversight duties.”

Proxy adviser Institutional Shareholder Services stopped short of this. It raised concerns “related to the misleading, initial statement” that Ian Lundin planned to step down from the board, but added that this is “largely mitigated” by his absence from the future board. (ISS did recommend “no” votes for three directors who it said sit on too many corporate boards.)

In the end, a majority of shareholders embraced the company’s view. Lundin Energy announced that Ian Lundin and Mr. Schneiter were returned to the board in the annual director election on March 30.

The company doesn’t release vote totals, so we’ll never know just how few shareholders found an indictment for alleged war crimes to be disqualifying. Then again, we shouldn’t be surprised at the result: The Lundin companies have long track records that shareholders likely examined before they made the conscious choice to hand their money over.

Editor’s note: A column on Lundin Energy and director Ian Lundin misstated the nature of a future business combination for the company. Lundin Energy will merge its oil and gas assets with Norwegian company Aker BP later this year. Directors Ian Lundin and Alex Schneiter will not remain on the board of the smaller, renewables-focused Lundin Energy board after the transaction.

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