Two former top executives of energy firm, Afren, were on Wednesday convicted after they were found guilty of money laundering offences in the United Kingdom, Nigeria’s Premium Times reports.
Osman Shahenshah and Shahid Ullah were found guilty of fraud and money laundering offences from which prosecutors said they personally received more than $17 million in a case involving Oriental Energy, founded by Nigerian billionaire oil magnate Muhammadu Indimi.
Elombah News reports that Muhammad Indimi is also an in-law to President Buhari. Through his Indimi Foundation Initiative, he has touched many lives especially in his home state of Borno.
Prosecutors said Mr Shahenshah, 55, the former chief executive of Afren and Mr Ullah, 58, the oil company’s Texas-based former chief operating officer, laundered $45 million by deceiving the Afren Board into agreeing a $300 million business deal.
Following a shareholder revolt which objected to their £6.6 million and £3.8 million salary packages and faced with the possibility of lower remuneration in future, the two hatched a fraudulent scheme to secretly increase their pay
Details seen by PREMIUM TIMES from the U.K Serious Fraud Office (SFO) showed that Messrs Shahenshah and Ullah created a side deal with one of Afren’s Nigerian oil partners, Oriental Energy, that would allow them to benefit from payments Afren would make.
The men recommended a transaction to the Afren Board, who then approved payments of hundreds of millions of dollars without knowing that Messrs Shahenshah and Ullah stood to personally benefit. The transaction was claimed to be necessary to maintain the business partnership, but the fact that Messrs Shahenshah and Ullah stood to benefit personally remained hidden.
In his comments, Lisa Osofsky, Director of the Serious Fraud Office, said greed motivated the crime.
“Osman Shahenshah and Shahid Ullah failed in their duties as company directors, abused their positions and lied to their board,” he said.
“Instead of acting in their company’s best interests, they used Afren like a personal bank account to fund an illicit deal, with no regard for the consequences.
“Fraud corrodes confidence, undermines trust and damages the reputation of the UK at home and abroad. It is our mission to bring those committing this crime to justice.”
Details showed that the criminal investigation into the former CEO and COO of the collapsed oil and gas exploration company began in June 2015 following a self-report by the company, with the defendants charged with four offences in September last year.
The SFO said Messrs Shahenshah and Ullah recommended that the Afren Board agree to a $300 million payment to Oriental Energy Resources Ltd, the company’s oil field partner in Nigeria. But SFO said that unknown to the Afren board, Messrs Shahenshah and Ullah had struck a side deal with Oriental which led to 15 per cent of the $300 million was then paid out to a Caribbean shell company controlled by the defendants. The men then used the $45 million to purchase luxury properties in Mustique and the British Virgin Islands.
The UK prosecutors said a smaller portion of the $45 million laundered was split between Oriental employees and a close network of Afren staff dubbed ‘The A Team’.
In 2014, Afren dismissed the two officials after an independent review by law firm Willkie Farr & Gallagher LP (WFG) alleged that the duo received more than $17 million in unauthorised payments from Oriental, its Nigerian joint-venture partner and 60 percent equity owner operator of the Ebok assets, offshore Nigeria.
In the law firm review, WFG alleged that Ntiti is owned and controlled by Messrs Shahenshah and Ullah, and that they had used the vehicle to pay special bonuses to themselves and other Afren employees.
But Oriental in its reaction dismissed allegations of unauthorised payments made to its employees.
Earlier in 2012, the company said, Oriental and Afren initially entered into the Oriental Ebok Forward Sale of Crude Oil Agreement. Through the deal, Oriental said it agreed to sell approximately one million barrels of its future oil production to Afren thereby permitting Afren to book those reserves in 2012. The reason the $100 million payment to Oriental was included in Afren’s balance sheet for 31 December 2012 under the line “Prepayment and Advances to Partners” is because it was a prepayment for Oriental’s future oil production, it said.
The company argued that in October 2013, it entered into an agreement with NTITI, the Oil Field Development Optimization Services Agreement, represented by senior executives of the Ebok Joint Operating Team (“JOT”).
The statement by Amina Indimi, the company’s media contact, added that there was an agreement to pay 15 per cent of the cash flows from its joint venture with Afren into a special purpose vehicle called Ntiti BVI, which was intended to reward and retain key employees connected to the project.
“Under the Optimisation Agreement Oriental agreed to pay up to 15% of its annual net Ebok Profit Oil proceeds to NTITI for the purpose of providing incentive compensation and retention of key employees who had proven themselves to be essential members of the Ebok JOT, a group reporting to the Ebok Operating Committee and comprised of employees seconded by both Oriental and Afren, as provided by the JOA,” the company said in a press statement.