Landkom International revealed it was in merger talks, and had started an internal investigation into overlooked land deals, as it announced the departure of chief executive Richard Spinks.

The London-listed group said it was in preliminary discussions with "another substantial Ukrainian farming operation", which it declined to name, over an all-share deal.

The talks come amid a quest for a new chief executive which Landkom said had borne fruit, with the board "in advanced discussions" with a successor to Mr Spinks, whose departure was trailed in May.

The candidate had come from outside the company, and is believed to be Ukrainian, a City source told Agrimoney.com.

Land negotiations

The new candidate will walk into negotiations over lease payments on 10,300 hectares of land which had been overlooked since being struck in late 2007 and early 2008.

The "previously unaccounted for" deals, into which Landkom had opened an internal investigation, could result in payments of $2.0m-2.5m, or the return of ready-sown land.

"Should agreement not be reached, the land may be returned along with crop in the ground planted for harvest in 2010," Landkom said.

The group was ahead of last year in autumn oilseed rape plantings.

Hail damage

However, yields for the newly-harvested crop had fallen to 2.7 tonnes per hectare this year, from 2.8 tonnes per hectare in 2008, after 675 hectares were "severely damaged" by hailstorms.

The data disappointed many investors, as did the sale price of $327 per tonne gained for 37,700 tonnes of the crop sold so far, out of a crop of 39,400 tonnes.

Analysts at Liberum Capital had forecast an improvemet in yields and sale price of $400 per tonne.

"Total revenue realised on the crop sold was US$12.33m. Our revenue forecast for the total rapeseed crop was US$21.8m," Liberum's Nick Walker said.