The former boss and chief operating officer of Afren, a London-listed oil and gas exploration business, have been charged with criminal offences over payments they received via secret companies relating to business deals in Nigeria.
Osman Shahenshah, 55, the ex-chief executive, and Shahid Ullah, 58, formerly chief operating officer, appeared in Westminster Magistrates Court yesterday charged with two counts of money laundering and two counts of fraud.
They will face the charges formally today. As well as criminal charges, the pair and a Nigerian contact face a civil damages claim in excess of $500m from Afren’s administrators.
In a statement, the UK Serious Fraud Office (SFO) said: “The alleged fraud is claimed to have led to the collapse of the $2.6bn oil giant by their administrators, who in related civil claims are seeking damages in excess of $500m from the defendants and a Nigerian associate.” SFO launched an investigation two years ago.
“(They) stand accused over payments they received via secret companies they controlled relating to over $400 million of Nigeria business deals,” the SFO said. “Afren, which was a FTSE 250-listed company until it collapsed in 2015, reported itself to the SFO after details of the alleged secret payments were detailed in an independent review by the US law firm Willkie Farr & Gallagher.
Lawyers for the men did not immediately respond to requests for comment. A lawyer for Shahenshah told the Financial Times: “My client is fully aware of the proposed charges, which are considered to be without foundation. Accordingly, they will be vigorously defended.” Ullah has previously denied the charges.
Afren sacked its chief executive, chief operating officer and two associate directors after an independent review into unauthorised payments in 2014 found evidence of “gross misconduct”.
In a counterclaim to the administrators’ legal action, Mr Shahenshah has alleged the Afren board knew about the payments from Oriental Resources. He claimed wrongful dismissal and said the scandal had damaged his reputation.
The company’s shares lost nearly all of their value after being hit by a slump in oil prices, the dismissal of the top executives and the absence of proven or probable reserves at an oilfield in the Iraqi Kurdistan Region. Afren went into administration in July 2015 after failing to secure support for a vital refinancing and restructuring plan. The SFO opened its investigation into Afren in June 2015.