The bosses of collapsed oil and gas giant Afren tried to “enrich” themselves as well as colleagues in their ‘A-Team’ via business deals in Nigeria, lawyers for the Serious Fraud Office (SFO) have argued during a trial in the UK.
Prosecuting QC John McGuinness told a jury on Tuesday that Afren’s former chief executive Osman Shahenshah and ex-chief operating officer Shahid Ullah committed fraud “for the purpose of enriching themselves at the expense of their employer” and did so “behind the back” of the now collapsed firm’s board.
According to Telegraph UK, the pair, who formed a group called the ‘A Team’ with select colleagues, are facing claims that they abused their positions and laundered money following a two-year probe by the SFO. They were sacked for gross misconduct in 2014, a year before the former FTSE 250 firm went bust.
Dressed in dark suits, Mr Shahenshah and Mr Ullah appeared in Southwark Crown Court on Tuesday for the first day of what is expected to be a six week trial. They have pleaded not guilty.
Mr McGuinness claimed that the pair “believed they were not being rewarded sufficiently” for successful agreements involving two Nigerian oil projects called Ebok and Okoro, a feeling he says was shared by others within the business. In 2012 Mr Shahenshah’s total pay package exceeded £6m, while Mr Ullah’s was £3.6m.
“Prosecution say there was a feeling, shared by other people at Afren, rightly or wrongly, that they ought to be paid more than they were being paid,” he said.
The case centres around $400m (£311m) which was transferred from Afren to firms linked to the Ebok and Okoro fields and which the pair are alleged to have had a undisclosed personal interests in.
In one example, Mr McGuiness said Afren had agreed to pay a company called Amni Petroleum $100m to balance out an uneven tax rate. However Mr Shahenshah and Mr Ullah did not tell the board that the money was being used to buy out the firm’s main shareholders, nor that they intended to have some sort of shareholding in the project themselves.
The prosecution also pointed to emails between Mr Shahenshah and a bank, which was asking for proof that disclosure has been made to Afren’s board members. When Mr Shahenshah forwarded the email to Mr Ullah he allegedly responded with the word: “fudge”.
“The implication of that, says the prosecution, is that Mr Ullah is saying well we need to fudge this,” said Mr McGuinness.
He added that the pair were also very experienced businessmen who must have known they were acting in a manner “that was contrary to their positions” or involved them having a conflict of interest.
“These duties are not obscure, [..] it’s not rocket science that directors are subject to those duties,” he argued.
The pair each face four charges. Two relate to fraud by abuse of position and two to money laundering between May 2013 and July 2014.