Osman Shahenshah
Exactly
two weeks after Italian prosecutors accused Eni of paying $533m bribe
to Nigerian politicians and others to purchase an oil field in 2011,
United Kingdom-listed independent oil and gas producer, Afren Plc, has
dismissed its chief executive officer, Osman Shahenshah, and two others
over payments involving Nigerian oil firm, Oriental Energy Resources.
Afren announced on Tuesday that the law
firm of Willkie Farr & Gallagher (UK) LLP had completed its
independent review into the receipt of unauthorised payments by members
of management and senior employees.
“In connection with the conclusion of
this review, the company has decided to terminate the employment and
directorships of Osman Shahenshah and Shahid Ullah with immediate
effect,” the company said in a statement published on its website.
The review found that Shahenshah and
Ullah had agreed with Oriental to receive 15 per cent of the net cash
flows that was due to Oriental from the Ebok oil field for five years
from 2013 in exchange for $400m in funding by Afren.
Oriental paid $45m in 2013 into a special
purpose vehicle owned and controlled by Shahenshah and Ullah, who used
the funds to pay bonuses to themselves and selected employees of Afren,
according to the review.
The WFG’s review found no evidence that either matter was discussed with Afren’s board, according to the statement.
“WFG has concluded that in October 2013
Shahenshah and Ullah entered into an agreement with Oriental by which
Oriental agreed to pay 15 per cent of the agreed net cash flows that
Oriental was due to receive from Ebok for the period 2013 to 2017 to a
British Virgin Islands special purpose vehicle, Ntiti Limited, in
exchange for facilitating $400m in funding by Afren to Oriental,” the
WFG stated.
“Shahenshah and Ullah, with assistance
from Afren’s former Nigeria Business Development Manager, Faiz Imam,
used the funds in part to pay extraordinary bonuses to themselves
($17.1m in total was paid to Shahenshah and Ullah), and to other
selected employees of Afren,” it further said.
According to the statement, both
Shahenshah and Ullah have admitted the receipt of the payments referred
to above, although they initially denied that the arrangement had been
entered into.
The law firm also uncovered evidence that
suggested that the two executives sought personal benefits from a 2013
management buy-out of AMNI International Petroleum Development Company
Limited.
In the review, 11 employees – past and present – were found to have benefited from payments from Oriental Energy.
Afren also sacked Associate Directors,
Iain Wright and Galib Virani, saying they received payments in breach of
the company’s approved remuneration policy and that it would seek to
recover such sums.
“The Board has instructed counsel to
commence legal proceedings against Shahenshah and Ullah, if necessary,
to recover sums in respect of such unauthorised payments,” the statement
added.
Afren suspended Shahenshah and Ullah in
July when it began the review, and the two associate directors in August
as the review expanded.
The company said Toby Hayward would
remain as interim chief executive, while its board searched for
replacements. Egbert Imomoh will remain as executive chairman.
Two weeks ago, Italian oil and gas major
Eni, the parent company of Nigeria Agip Oil Company, was alleged to have
used at least half of the $1.1bn paid to purchase a Nigerian oil field
in 2011 to bribe local politicians, intermediaries and others.
The Milan prosecutors, who recently
opened a probe into the acquisition, had placed the company, its former
chief executive, Paolo Scaroni, and the incumbent, Claudio Descalzi,
under investigation for alleged international corruption surrounding the
deal for the Oil Prospecting Licence 245 offshore oil field concession
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