Osman Shahenshah and Shahid Ullah, two ex-officials of oil company, Afren, have been sentenced to a total of 30 years for fraud and money laundering offences.
Messrs Shahenshah and Ullah had committed the offences whilst they were Chief Executive Officer (CEO) and Chief Operating Officer (COO) of Afren.
PREMIUM TIMES reported last week that the men were found guilty for a scheme they created to profit from business deals Afren made with its Nigerian oil partner, Oriental Energy, without the knowledge of Afren’s board of directors.
Prosecutors said they laundered more than $45 million from a $300 million deal they recommended to Afren, using their illicit proceeds to purchase luxury properties in the Caribbean.
While giving his verdict on Monday, Judge Gledhill QC said of the two officials: “You believed that you were above the law, you believed that you were so clever that no one would ever discover your offending.”
On his part, Lisa Osofsky, Director of the Serious Fraud Office, said the significant sentences reflect the seriousness of the fraud.
“Shahenshah and Ullah violated their duties and their employees, the board of directors and shareholders paid the price,” he added. “They abused their positions to line their own pockets and it is satisfying that they have been brought to justice.
“I would like to thank our international partners in the US Department of Justice, who greatly assisted with our investigation.”
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
The U.K Serious Fraud Office (SFO) said 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.
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.
In March 2018, the SFO said, following an investigation by the Insolvency Service, both Messrs Shahenshah and Ullah were banned by the courts from being company directors for 14 years for failing to declare to the Afren board their vested interests in a number of high-value transactions they had recommended.
While Afren Plc is an oil company in which a former Nigerian oil minister, Rilwanu Lukman, was a former chairman and founder, Oriental is owned by Nigerian billionaire Muhammadu Indimi.
Mr Indimi is in-law to President Muhammadu Buhari.
Mr Indimi’s Oriental Energy has, however, said it did no wrong.
The oil firm had in 2014 denied any wrongdoing. It is also not under any probe in Nigeria, according to details available to PREMIUM TIMES.
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