Two Afren ex-staff convicted of fraud, money laundering, says SFO.

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Serious Fraud Office

Two Afren ex-staff convicted of fraud, money laundering, says SFO.

United Kingdom’s Serious Fraud Office (SFO) has said that two former executives of the defunct Afren Plc were convicted yesterday of fraud and money laundering in a $300 million deal.

  The firm had a presence in Nigeria at the time the offenses were committed.

  Afren, an oil and gas exploration and production company once valued at $2.6 billion on the stock market, collapsed into administration in July 2015 after it was unable to service heavy debts, laying off hundreds of Nigerians in its employ.

  Nigerian banks, according to reports, lost a whopping N36.630 billion ($185 million) following Afren’s liquidation.

  Former Afren chief executive, Osman Shahenshah, and former chief operating officer, Shahid Ullah, received more than $17 million and laundered $45 million, some of which were used to buy luxury properties in Mustique and the British Virgin Islands, the fraud office said.

  Shahenshah and Ullah created shell companies and agreed to a side deal with one of Afren’s Nigerian oil partners from which they would benefit, without the knowledge of Afren’s board, the SFO added.

  “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,” Reuters quoted Lisa Osofsky, director of the SFO, to have said in a statement.

  The men, who did not enter a plea, were found not guilty at Southwark Crown Court on a separate charge relating to a management buyout of another of Afren’s business partners.

  Shahenshah’s solicitor did not immediately respond to a request for comment. Ditto with Ullah via LinkedIn.

  The criminal investigation began in June 2015 following a self-report by Afren, while the defendants were charged with four offences in September last year.

  Afren sacked Shahenshah and Ullah after an independent review in 2014 found evidence of “gross misconduct”.

  The company’s shares lost nearly all value after being hit by a slump in oil prices, the dismissal of the executives and the absence of proven or probable reserves at an oil field in the Iraqi Kurdistan region.

  Afren went into administration in July 2015 after failing to secure support for a re-financing and re-structuring plan.

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