LONDON — Two former executives of oil company Afren have been charged with fraud relating to over $US400 million-worth (£300 million) of business deals that allegedly led to the collapse of the FTSE 250 company.
The UK’s Serious Fraud Office (SFO) has charged Afren’s CEO Osman Shahenshah and COO Shahid Ullah with two counts of fraud and two counts of money laundering, relating to payments they received via secret companies. The charges follow a two-year investigation by the SFO. Both men are due to appear at Westminster Magistrates court on Wednesday.
The SFO’s charges relate to alleged “secret agreements with their [Afren’s] joint venture partners in Nigeria arranged by the former CEO Osman Shahenshah and COO Shahid Ullah,” the watchdog said in a statement.
In a separate civil action, the company’s administrators are seeking damages of more than $US500 million (£373 million) from both men, as well as a Nigerian associate.
Law firm Wilkie Farr & Gallagher began an independent review into unauthorised payments at Afren in 2014. In August of 2014, Afren’s pre-tax profits dropped almost 50%, following the announcement that it had suspended two directors in relation to the investigation.
Later that year, when the firm reported its full findings, Afren announced that Shahenshah and Ullah had been fired. It also said it had secured from them “a cash payment of $US17.1 million (£13 million) in relation to payments made to them that were not authorised by the Board.”
Afren was worth $US2.6 billion (£1.9 billion) at its height but went into administration in 2015, with liabilities of more than $US1 billion, according to the documents filed with Companies House.
Afren’s stocks plummeted in 2014, shortly before the company went into administration:
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