14th Oct 2014 06:42
LONDON (Alliance News) - Afren PLC Tuesday confirmed that it has terminated the employment of Chief Executive Osman Shahenshah and Chief Operating Officer Shahid Ullah with immediate effect, firing them for gross misconduct based on evidence found by a review that unearthed irregular payments and starting legal proceedings to recover money from them.
It also fired Associate Directors Iain Wright and Galib Virani with immediate effect for the same reasons, and started disciplinary action against seven more employees who it said also received payments.
The oil and gas explorer and producer suspended Shahenshah and Ullah in late July pending an investigation into alleged evidence of unauthorised payments that were potentially for the benefit of those executives. The payments came to light in the course of Willkie Farr & Gallagher's independent review, commissioned by Afren's board, of the potential need for the company to disclose certain previous transactions to the market.
"The decision to terminate the employment and directorships of Mr Shahenshah and Mr Ullah for gross misconduct was based on evidence identified by WFG of breaches by Mr Shahenshah and Mr Ullah of their obligations to Afren as employees and directors, in particular the receipt of unauthorised payments from third parties. The board has instructed counsel to commence legal proceedings against Mr Shahenshah and Mr Ullah, if necessary, to recover sums in respect of such unauthorised payments," Afren said in a statement Tuesday.
It said it had begun searching for replacements for the CEO and COO, and Egbert Imomoh will remain executive chairman and Toby Hayward interim CEO in the meantime.
Afren said it is making the results of the review available to the Financial Conduct Authority.
It said the Willkie Farr & Gallagher review uncovered two instances of the company failing to comply with its reporting obligations under the listing rules, and a further transaction that was subject to the investigation was not required to be disclosed. All three were connected to the issues raised in the unauthorised payments review, it said.
"As previously announced, unauthorised payments were received by the CEO Osman Shahenshah and COO Shahid Ullah and two Associate Directors, Iain Wright and Galib Virani. A further seven current and former employees also received payments," it said.
"The board believes that neither of the partners involved in these transactions were aware of any wrong-doing," it added.
Afren has started disciplinary action against the other seven employees involved in the receipt of unauthorised payments.
Afren reiterated that it hasn't suffered a material loss as a result of the transactions.
"The decisive and comprehensive actions we have set out today should leave no-one in any doubt about how seriously Afren takes the issues uncovered in July and our commitment to rebuild the confidence of shareholders, partners, staff and our other stakeholders. Our focus is now on delivering the significant opportunities we have before us with an open and transparent approach to our business based upon mutual respect, the highest standards of ethics, governance and business conduct," Imomoh said in a statement.
By Steve McGrath; [email protected]; @stevemcgrath1
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