Afren suspends CEO, COO pending unauthorised payments investigation

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Afren Plc has temporarily suspended Chief Executive Osman Shahenshah and Chief Operating Officer Shahid Ullah pending an investigation into payments, the London Stock Exchange (LSE) listed oil explorer said in a statement on Thursday.

The Nigeria-focused company said in a statement on the London Stock Exchange’s company news service that a review for the board found evidence of “the receipt of unauthorised payments potentially for the benefit of the CEO and COO”.

“These payments were not made by the company. The investigation has not found any evidence that any other board members were involved,” Afren said in a statement.

“No conclusive findings have yet been reached and the investigation is ongoing,” the statement added.

The investigation is being conducted by law firm Willkie Farr & Gallagher.

The public relations firm acting on behalf of Afren said there was no further comment from the company, Shahenshah or Ullah.

Afren said it would postpone half-year results which were due on August 4, though it said the board has no reason to believe the investigation will negatively affect the company’s financial or operational position.

A new date in August will be announced in due course.

Investec Securities analyst Brian Gallagher said in a note to clients on Thursday that it had downgraded the stock to “hold” from a “buy” rating, and was reviewing its price target.

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

In May, Afren reported first-quarter net production of 35,465 barrels of oil per day, lower than its target of 40,000.

Afren, which is targeting double-digit production growth over the next five years, has its main assets in Nigeria but also operates in Kenya and Kurdistan.

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