Osman Shahenshah and Shahid Ullah, former chief executive officer 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 over $400 million business deals in Nigeria.
The duo, who appeared in Westminster magistrates court on Tuesday, were charged with two counts of money laundering and two counts of fraud.
The pair and a Nigerian contact faced the charges formally on Wednesday alongside a civil damage claim in excess of $500 million from Afren’s administrators.
“The alleged fraud is claimed to have led to the collapse of the $2.6 billion oil giant by their administrators, who in related civil claims are seeking damages in excess of $500 million from the defendants and a Nigerian associate,” UK Serious Fraud Office (SFO) said in a statement.
“They stand accused over payments they received via secret companies they controlled relating to millions of dollar business deals in Nigeria.
“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.”
The lawyers for the accused did not immediately respond to requests for comment.
“My client is fully aware of the proposed charges, which are considered to be without foundation. Accordingly, they will be vigorously defended,” a lawyer for Shahenshah told the Financial Times.
Afren sacked both men and two associate directors after an independent review into unauthorised payments in 2014 found evidence of ‘gross misconduct’.
In a counterclaim, Shahenshah alleged that 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 nearly lost all their value after a drop in oil prices, dismissal of the top executives and the absence of proven or probable reserves at an oilfield in the Iraqi Kurdistan region.
The SFO opened its investigation into Afren in June 2015.