Quest Resource CEO quits amid investigation

(Reuters) - Oil exploration and production company Quest Resource Corp (QRCP.O) said Chief Executive Jerry Cash resigned following the discovery of questionable transfer of company funds to an entity controlled by him, knocking its shares down to a 52-week low.

The company said Cash had resigned as chairman and chief executive of Quest Resource and related entities -- Quest Energy Partners L.P. (QELP.O) and Quest Midstream Partners L.P. -- effective immediately.

The company said Cash's resignation followed the discovery, in connection with an inquiry from the Oklahoma Department of Securities, of questionable transfers of company funds worth about $10 million.

Members of the three boards named David Lawler president of each entity and director of Quest Resource, where he has been serving as chief operating officer since May 2007.

The boards have formed a joint special committee to investigate the matter and consider the effects on its financial statements, Quest said.

Chief Financial Officer David Grose was placed on a paid administrative leave of absence during the investigation, the company added in its statement.

Quest Resource shares were down 22 percent at $5.40 in morning trade on Nasdaq. They touched a 52-week low of $5.04 earlier in the session. Quest Energy Partners' shares were down almost 28 percent at $10.24.

(Reporting by Sakthi Prasad in Bangalore; Editing by Himani Sarkar)