A Review of the Nigerian Energy Industry

Afren plunges after suspending CEO, COO amid probe

Osman Shahenshah31 July 2014, London – Afren Plc (AFR) shares plunged the most on record in London trading after the U.K. explorer focused on Nigeria and Kurdistan suspended two top executives amid a probe into unauthorized payments.

The shares fell as much as 34 percent, the most since March 2005, and were 29 percent down at 106 pence by 10:51 a.m. The stock was the worst performer on the FTSE All-Share Index. (ASX).

Afren suspended Chief Executive Officer Osman Shahenshah and Chief Operating Officer Shahid Ullah after an investigation found they may have benefited from unauthorized payments, the company said in a statement today. The investigation is being conducted by law firm Willkie Farr & Gallagher.

A spokeswoman for the Serious Fraud Office in London didn’t immediately respond to a request for comment.

The payments weren’t made by the company and the probe didn’t find evidence that other board members were involved, the explorer said.

Egbert Imomoh will become executive chairman, and the board appointed Toby Hayward, currently senior independent director, as interim CEO while the investigation continues.

Half-year earnings, scheduled for Aug. 4, have been postponed with a new date to be announced by the end of August.

“Corporate governance at the company has always been controversial. If there’s no further issues, it may be a sign of improvement, Jamal Orazbayeva, an analyst at Westhouse Securities Ltd., said by phone from London. ‘‘The market needs more clarification to find out what’s happened. At least these are not payments made by the company and there are no other board members involved.”
*Alex Devine in London at adevine3@bloomberg.net; Nidaa Bakhsh in London at nbakhsh@bloomberg.net

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