The United Kingdom’s Serious Fraud Office, on Monday, said two former top executives of a collapsed oil company, Afren Plc, were sentenced to up to six years in prison after they were found guilty of fraud and money laundering offences over a $300m business deals in Nigeria.
Afren, an oil and gas exploration and production company once valued at $2.6bn on the stock market with operations in Nigeria, collapsed into administration in July 2015 after it was unable to service heavy debts.
The SFO, in a statement on its website, said Osman Shahenshah and Shahid Ullah received a total of 30 years for fraud and money laundering offences they had committed while they were chief executive officer and chief operating officer of Afren, respectively.
It noted that the men were found guilty at trial earlier this month for a scheme they created to profit from business deals Afren made with its Nigerian oil partners, without the knowledge of the board of directors.
Shahenshah was said to have received six years jail for one count of fraud; six years concurrent for one count of money laundering; and four years concurrent for one count of money laundering.
Ullah received five years jail for one count of fraud; five years concurrent for one count of money laundering; and four years concurrent for one count of money laundering.
According to the statement, Shahenshah and Ullah laundered more than $45m from a $300m deal they recommended to Afren, using their illicit proceeds to purchase luxury properties in the Caribbean.
Sentencing Shahenshah, His Honour Judge Gledhill QC was quoted as saying, “You believed that you were above the law; you believed that you were so clever that no one would ever discover your offending.”
The Director, SFO, Lisa Osofsky, said the significant sentences reflected the seriousness of the fraud, adding that Shahenshah and Ullah violated their duties and their employees, the board of directors and shareholders paid the price.
“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,” she added.
The SFO said Shahenshah and Ullah hatched their scheme to secretly increase their income when faced with the possibility of lower remuneration in the future after shareholders rejected their £6.6m and £3.8m salary packages in 2013.
It stated, “Shahenshah and Ullah recommended that the Afren board agree to a $300m payment to Oriental Energy Resources Limited, the company’s oil field partner in Nigeria. Unknown to the Afren board, Shahenshah and Ullah had struck a side deal with Oriental, which led to 15 per cent of the $300m being paid out to a Caribbean shell company controlled by the defendants.
“The men then used the $45m to purchase luxury properties in Mustique and the British Virgin Islands. A smaller portion of the $45m laundered was split between Oriental employees and a close network of Afren staff dubbed ‘The A Team’.”
The SFO’s criminal investigation into the actions of the former CEO and COO of the company began in June 2015 following a self-report by the company’s administrators, with the defendants charged with four offences in September last year.