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Report: Money laundering trial for former Afren executives begins


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Report: Money laundering trial for former Afren executives begins

Two former executives of defunct independent oil and natural gas producer Afren PLC are on trial for alleged money laundering in the United Kingdom, according to Bloomberg.

Afren's ex-CEO Osman Shahenshah and former head of operations Shahid Ullah are charged by the Serious Fraud Office, or SFO, with two counts of fraud and two counts of money-laundering between May 2013 and July 2014. Prosecutors assert that Shahenshah pocketed more than $9 million, while Ullah netted $7 million from the fraud. The two men have pleaded not guilty.

Afren made most of its revenue from two Nigerian oil projects, Ebok and Okoro, both of which it developed with local partners. The company collapsed in 2015 after the alleged fraud was discovered, resulting in a two-year investigation by the SFO.

The first alleged fraud was related to Ebok, in which Afren had a 40% interest. The rest was held by Oriental Energy Resources Ltd., a company owned by Muhammadu Indimi. Afren put up the capital to develop the oil field and the two companies agreed to split the profits evenly after that investment was repaid.

Indimi asked for an advance on his profits, and the Afren board agreed after Shahenshah had advised it to do so, the article said. However, Shahenshah and Ullah had a deal with Indimi that a British Virgin Island-registered company owned by Ullah and Shahenshah's wife would receive 15% of $300 million that Afren paid. Some of the money also went to other Afren employees.

The second fraud was related to the Okoro, for which Afren put up the capital but did not own a stake. On Shahenshah's direction, Afren agreed to pay Amni Petroleum $100 million to balance out uneven taxation on the two partners. However, the money was actually being used by Amni's main shareholder to buy out his partners and that the pair were also to become shareholders in the project, the Bloomberg article said.