Shares in West African exploratory firm Lekoil fell over 70 per cent today after the company revealed that it had been the victim of fraud by individuals purporting to be representatives of a Qatari equity fund.
Yesterday Qatar Investment Authority (QIA) contacted the firm questioning the validity of a $184m loan Lekoil had announced with it on 2 January. As a result, the AIM-listed company’s shares were suspended.
This morning shares opened at 2.50p, having been suspended at Friday’s closing price of 9.40p, as investors reacted to the firm’s duping. Shares are currently trading at 2.94p.
In a statement last night, the firm said the deal “seems to have been entered into by the company with individuals who have constructed a complex facade in order to masquerade as representatives of the QIA.”
Sources close to QIA told City A.M. that the fund had no knowledge of any loan.
The fake loan was arranged by a investment company called Seawave Invest, which lists offices in the Bahamas and Ghana on its website.
Lekoil paid Seawave $600,000 for introducing it to the individuals “purporting to be the QIA”, money which the firm said it would attempt to recover as it began an internal investigation into the fraud.
City A.M. has been unable to contact the company.
The loan was intended for the financing of drilling and development on the Ogo field off Nigeria. The future of Lekoil’s 17 per cent stake in the field is now reportedly in doubt, as the company needs to find $40m by next month.
Lekoil only announced the funding on Friday. The loan was set to be distributed in five tranches over 11 months, with the first drawdown intended for February.
Shares in the company had surged on the back of the news, more than doubling to 9.40p.