Wednesday 24 October 2018 3:08 pm

Ex-Afren executives guilty of $300m oil business deal fraud


Jess Clark is a City A.M. news reporter covering private equity and investment.

Jess Clark is a City A.M. news reporter covering private equity and investment.

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Two former Afren oil executives who laundered $45m (£34.83m) after deceiving the now collapsed company into a fraudulent $300m deal have today been found guilty.

Former chief executive Osman Shahenshah, 56, and ex-chief operating officer Shahid Ullah, 59, hatched the plan after a shareholder revolt objected to their £6.6m and £3.8m salaries.

Read more: Afren sinks into administration

The duo created a side deal with one of Afren’s Nigerian oil partners that would allow them to benefit from Afren’s payments.

They then recommended a $300m payment to the board that was approved and, unknown to the board, saw Shahenshah and Ullah personally receive a cut of the money.

“Greed motivated this crime. Osman Shahenshah and Shahid Ullah failed in their duties as company directors, abused their positions and lied to their board," said Serious Fraud Office director Lisa Osofsky. 

“Instead of acting in their company’s best interests, they used Afren like a personal bank account to fund an illicit deal, with no regard for the consequences.

“Fraud corrodes confidence, undermines trust and damages the reputation of the UK at home and abroad. It is our mission to bring those committing this crime to justice.”

A criminal investigation into the pair was launched in June 2015, and the defendants were charged in September last year.


The former bosses recommended that the Afren board agreed to a $300m payment to Oriental Energy Resources, the company’s Nigerian oil field partner.

However, Shahenshah and Ullah had struck a side deal with Oriental to pay 15 per cent of the money to a Caribbean shell company controlled by the defendants, which was then used to buy luxury properties in Mustique and the British Virgin Islands.

Some of the $45m was split between Oriental employees and a network of Afren staff dubbed “the A Team”.

The duo were found not guilty on a separate charge relating to a management buyout of another of Afren’s business partners.

They will be sentenced at Southwark Crown Court on 29 October.

Read more: Afren’s future hangs in balance after Luxembourg suspension

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