This court case is against two directors who were suspended long before Afren collapsed. The new board reported the non standard payment methods to the SFO to draw attention away from the real cause of Afren's collapse, ie: themselves.
Osman ans Shahid may have broken the rules, but it was not them who stole the company from the shareholders. The SFO are wasting their time on technicalities, rather than investigating a mammoth fraud.
This old, but detailed post paints a very different picture.
The former chief executive Osman Shahenshah and chief operating officer Shahid Ullah were charged at Westminster magistrates court earlier this week with criminal offences relating to the alleged £45 million fraud that led to Afren's collapse. The two allegedly struck a secret deal in 2013, whereby a Nigerian company agreed to pay 15% of the cash flow from an oilfield over four years to an offshore entity controlled by the two (as reported in the Financial Times).
BREAKING: Afren Shareholders seek crowdfunding to pursue directors in Court
By Tom Winnifrith | Sunday 30 October 2016
I do not hold out much hope for this bunch and they should have heeded my oft repeated advice to sell their shares instead of insulting me. However it seems as if some Afren (AFR) shareholders want to fight on and nail the directors. In that - since I instinctively have no time for City fat cats I wish the Afren Legal Action Group (ALAG) the best of luck and if they can make the lives of directors who earned a fortune but failed more miserable this Christmas that has to be a good thing don't you think? ALAG has written to its members thus:
We need to move and we have a legal firm happy to act. As you know Afren plc is now in administration, and we are concerned that we will not get any of our investment back. An offer was made to buy the company shortly before its administration (the Offer), but it was rejected by the directors (who were advised as such by the bondholders) and subsequently also by the administrators. We met recently a new company that claimed to have offered 30% debt cut, around $800m to buy Afren and commitments to drill wells to increase production.
We believe that the Offer should have been accepted (or at least seriously considered), and we feel that the directors and subsequently the administrators did not act in accordance with their duties in rejecting the same. Presumably we are interested in bringing a claim against the directors and/or the administrators for the damage that my fellow shareholders have suffered as a result of the Offer not being accepted (i.e. flowing from the directors/administrators breaches of duty).
We would like to explore the possibility of making a pre-action disclosure application to the court. Presumably and based on the information we have we hope this will shed some light on the decisions taken by the directors and subsequently the administrators to reject the Offer.
In any event, an application to the court should really be the last resort in these circumstances. We have been suggested in the first instance writing to the directors and the administrators and asking them for a full explanation of why they rejected the Offer, and for any supporting documentation (including relevant contemporaneous communications). If this request is unsuccessful, or the directors and administrators comply but the result falls short of what we require, we can then consider making an application to the court. The fact that a document request has been made of the proposed defendants should assist with such an application, as may any information that is obtained from the same.
A legal firm could prepare the initial document request for us, and they could act on our behalf as the matter progresses.
Please also let me know if you have any questions. We will share thee details of the legal firm in due time. We need funding for this strategy, around 1% of our loses.Any help will be highly appreciated.Help raise £50000 to finance the Legal Expenses of our claim to recover losses incurred by Afren Legal Action Group's members resulting from Afren's collapse.
A rather belated reply, but yes it is all over as far as Afren is concerned, and shareholders have little or no chance of receiving any money for their delisted shares.
However, FWIW an article in today's Daily Mail stated that the Serious Fraud Office (SFO) is investigating the collapse of Afren. So the villains may one day face justice, but going on past SFO performance this could take years, and result in little more than a slap on the wrist for anyone deemed to have acted improperly.
If any shareholder, company official or interested party in Afren PLC can provide any factual information of any event involving the company that they feel should be reported to the regulatory authorities or has unnecessarily damaged the value of the company, please can they collate the information and forward it accordingly to afrenlegalaction at yahoo com asap Thanks
I tried to get the SFO interested in the BoD of AFF who basically got a $2.5 million cash bung for recommending a TO. They ignored me for two years until I sent them a Freedom of Information request asking for the internal correspondence that my information had generated.
They told me that the correspondence was 'sensitive', i.e. they didn't want to show me that they had done nothing. However, this did lead to them giving me a response to the issues I had raised.
You could try using the FOI Act with the FCA to try and force them into a response.
Firstly, thank you very much for your input and advice.
The sad thing is, the FCA and SFO seldom take any action against ye perpetrators, even when the evidence is stuffed under their noses. The so called administration administered often just as bad as the insolvent company, if not worse. It's a bit like a poacher killing an endangered species, people know it goes on yet unless they catch them with their finger on the trigger they do nothing, the corpse gets left to rot and the other animals take it in turn to strip what's left of the carcass until it's just bones.
We can only hope that Karma works it's magic on the guilty ones and at some stage in their life's they too experience what they dished out.
I feel for you, I know what youre going through, and Id like to just post my condolences, support, and maybe something you may find interesting reading?
Its nothing to do with your crusade, but there are similarities, and I find it disgusting for you, Afren shareholders, as I do for my fellow Yell shareholders. [I held shares in Afren for a while, but sold at a loss, of a few hundred pounds]
Firstly the FCA, are being heavily criticised at the moment, for 'letting banks off the hook'
and it should be a good time for your and mine MP to raise questions regarding the conduct of the FCA in Parliament.
Some of you might think that the FCA will help you, as it seems so obvious that you are 'in the right'
Thats what we felt too. Doesnt happen though......the levels of cronyism are unbelievable.
Isnt it well overdue, that questions regarding the conduct of the FCA were raised in Parliament?
No doubt you will have read the recent headlines of the FCA dropping its investigation into the banks.
As a former Yell shareholder living in Bradford West, I would like to make you aware of the situation concerning the Yell Shareholders Group
Over the last few years, the FCA were contacted by over 66 MP's calling for an investigation into YELL, on behalf of their constituents, as the BOD cut out all the shareholders, and since then have carried on trading.
The FCA were put under pressure to do something, by hundreds of shareholders, and the MPS.
Guess what they did? Investigate Yell, Deloittes and the BOD?
They launched an internal investigantion into their own behaviour, and many months later, they came to the conclusion that they had acted perfectly acceptably.
Meanwhile Yell goes from strength to strength and the shareholders, have lost their life savings........
Cronyism, and corruption is abound it seems in the city. And these people are protected by the FCA.
I was/am a private shareholder of HIBU plc [formerly Yell, formerly Yellow Pages] and a couple of years ago, I was advised by the Administrators that Hibu plc shares had been cancelled on the London Stock Exchange.
The Administrators [deloittes] advised Hibu Shareholders that there would not be any cash distribution to shareholders, and therefore all my shares were removed from my account.
There is currently an S656 litigation being taken by a group of private shareholders [The Hibu Shareholders Group, or HSG] against Hibu, and the Board.
HSG has members, all private shareholders, in excess of 700 people, all who have not just lost a few pounds but tens, and hundreds of thousands of pounds, due to the actions of the board of directors of Hibu.
There is evidence of wrong doing, and I have written to the FCA, as have other shareholders, [in their hundreds and 66 Mps] yet the FCA just sent out the same standard emails, which do not address the issues raised.
The FCA do not appear to be acting as heir mandate states that they will.
I am disappointed with the Financial Conduct Authority. I expected that the new body replacing the FSA would prove more pro-active and more diligent [not difficult!!] in investigating and rooting out unprofessional conduct in the financial services sector.
It appears that my hopes were misplaced, and that there continues to be plenty of leeway for unscrupulous company directors and vulture funds to line their pockets away from the regulators gaze.
At the expense of small private shareholders.
From what I understand from other shareholders and the media:
1 ] the Hibu directors appear to have failed to act in the best interests of their employers (Hibu shareholders, of which I am one).
2 ] the Hibu directors appear to have failed to call a GM when the Share Capital fell below a cert
In regards Lekoil announcement, obviously all assets come with obligations, and presumably the liabilities only relate partially to 2015 so can't be that huge. How much is exactly? It would be good to see these quantified as this is a huge amount of oil as assessed, and it's appraisal, not exploration. Can we see all this detail to understand the real value of the deal?
Furthermore, a bid would normally also reflect the amount spent by the seller on drilling/appraisal/seismic etc to date. Surely that would offset -and more- any recent unsatisfied liabilities?
Also, we are confused as to how this fits with the Administration. As these are Afren liabilities, shouldn't they be put in the pot with all of the other debts due to creditors, and settled proportionately according to the official hierarchy? Or do JV partners somehow jump to the front of the queue ahead of the banks etc ? It would be good to get an explanation from Alix.
The Company announced on 1 December 2015 the acquisition of Afren's participating interest in OPL 310, taking Lekoil's economic interest to 70 per cent. and its participating interest to 40 per cent. With the removal of Afren from the partner group, Lekoil and Optimum can now accelerate appraisal work on the licence. Early analysis of the new 3D seismic data acquired in 2014 has identified other prospects and leads similar to Ogo in size. The Company expects to complete interpretation in the first half of 2016. Following this the partners plan to spud an appraisal well before the end of 2016. As a result of Lekoil's increased economic interest in OPL 310, the Ogo risked prospective resources net to Lekoil is estimated at 541.8 mmboe.
Acquisition of Afren's Participating Interest in OPL 310
Lekoil (AIM: LEK), the oil and gas exploration and production company with a focus on Nigeria and West Africa, has agreed to acquire Afren plc's ("Afren") entire 22.86% participating interest in OPL 310, which contains the Ogo discovery, for a total cash consideration of US$13 million (the "Consideration") (the "OPL 310 Acquisition")
I have been in the email group which you said earlier... for action group, but never reiceved no confirmation of emails... hope we still can manage to get something out from afren... good luck all holders...
Good work ldlv.
Court grants firms injunction over Afren Plc. Lagos High Court has granted an interlocutory injunction restraining the companys Administrators (Messrs Alix Partners) and the Blackstone Group from dealing with Afren assets.
Now delayed until 11th Jan 2016!!! Lets hope they NEVER manage to sell the assets! SAVE AFREN!
The trial judge, O.A. Adamson will take his time as he has a lot to review...!
From Lekoil recently: "Corporate Update Update on OPL 310 discussions Lekoil continues to be in advanced discussions with the administrator of Afren regarding the potential acquisition of its subsidiary which holds a 22.86 per cent. participating interest and 40 per cent. economic interest in OPL 310 (the Proposed Acquisition). Should the Proposed Acquisition be successfully concluded, the Company intends to meet the considerations from its existing financial resources and from the proceeds of the Placing"
A Lagos High Court sitting in Lagos has restrained an English public company operating in the Nigerian Oil and Gas sector, Afren Plc, from dealing with any of its assets in Nigeria or taking any further steps to register or seek the consent of any government authority in respect of any disposition, transfer or dissipation of the said assets pending the hearing and determination of the substantive suit filed by Earl-Act, a Nigerian investor.
Justice Obafemi Adamson in granting the interlocutory order of mareva injunction, also restrained the companys administrators (Messrs Alix Partners) and the Blackstone Group from the same steps.
The court also ordered the claimant to file a written undertaking within seven days of granting the restraining order, to compensate the defendant in damages if it is found that the restraining order ought not to have been granted or that same was obtained by fraud or misrepresented.
Justice Adamson however adjourned the matter to November 26, 2015, for continuation of proceedings.
In July this year, Afren Plc had announced the suspension of its shares in the London Stock Exchange due to what its management described as material uncertainty over its financial position.
The London-based oil firm, with its entire production revenue emanating from Nigeria, further refused to disclose its financial information to the public, on grounds of significant uncertainty.
This culminated in, a period described by its board and management as torrid plagued by unauthorised payments by directors, the crude oil price crash and a lack of liquidity.
So Barclays estimated that Ebok, Okoro and Okwok fields were worth a combined $981m as at 1 Jan 2015 and that is when discounted at NPV15
and now total assets are expected (as per the Sunday Times) to fetch $200m in a firesale - and that includes the furniture and artwork, which might be more in demand in this climate than the oilfields.
So that is what a firesale does to resale values, less than 20%, cant help feeling that some local investors are going to get some great bargains
A disaster for all concerned - including the bondholders by the way
I cannot hold out much hope here Idlv, I am afraid the Administrator will be relaxed as long as he is can flog everything off asap, and recover his fees, being a little cynical
what if there is an investor that is trying to rescue the company as a going concern. Apparently according to Alixp Afren plc needs $250m, according to Alixp and Alan Linn the money is not there! Management tried everything they said, the useless effort of the previous management that by the way put the company in administration is the excuse. Odd...
Imagine that the money is there, that an investor and its European partner are trying to offer a solution (that maybe involves a hair cut). But that hair cut would bring a better realization than selling the assets, while providing a solution for all the parts, Employees, shareholders, creditors...
In that case shouldn't the administrators facilitate negotiations to consider objective 1 as it could bring a better return than selling the assets for $200m (Sunday times numbers). Shouldn't the creditors be made aware of that potential solution?
Imagine that despite how hard the Investor and European partner try to discuss option 1 to rescue the company, they find an inflexible attitude and the ONLY interest of selling assets.
What would be your opinion in regards ethical and law implications of that scenario?
Again, According to the Restructuring and insolvency in UK (England & Wales)Law stated as at 01-Jul-2015,the administration procedure is a way of facilitating a rescue of a company or the better realization of its assets.
The main aim of administration is to rescue the company as a going concern.
Restructuring and insolvency in UK (England & Wales)
Status: Law stated as at 01-Jul-2015 Jurisdiction: United Kingdom
Administration Objective. The administration procedure is a way of facilitating a rescue of a company or the BETTER realisation of its assets.
The main aim of administration is to rescue the company as a going concern.
How the solution of selling all the assets for lets say $200m (number that appeared in the Sunday Times) is a better realisation than a hair cut and keep the company as a going concern? How can that be justified?
Production at the Okoro-Setu field ran smoothly during 2014, however, planned re-engineering works resulted in downtime at the site early in that year. Overall, the production from the field declined by 9% year-on-year.
did we see a 616% hit in the okoro production assets? $31m vs $191m!!! field declined by 9% year-on-year no 616%
Are Alixp selling OML 113 for $35m!? Great timing again if you take in account the news released this week!
These two wells represent the first of a three phase development programme of Aje. Phase 1 is targeting first oil in December 2015 and peak gross production of 41 API oil from these two wells is expected to reach 11,000 bopd, as stated in the June 2015 Competent Persons Report ("CPR"). The CPR also states that Phase 2 is targeting an increase in gross production to 19,000 bopd from an additional two well development. As announced on 13 July 2015, MX Oil has agreed to invest in a 5% revenue interest in OML 113 via Jacka Resources
In tandem with the development of the field, work is on-going to interpret the newly acquired 3-D seismic data. This new data will be used for planning Phases 2 and 3 on Aje and also to fully evaluate the exploration potential over the whole of the OML 113 licence, including the syn-rift exploration play that has been significantly de-risked following the 2013 Ogo discovery on contiguous block OPL 310.
Ebok and Okoro fields are clearly the company's most valuable assets. According to Barclays, using valuations discounted from 1 January 2015 and 15% discount rate, Ebok could be worth about $420 million, or risked net asset value per share of 2p, Okoro $191 million/0.9p and Okwok $370 million/1.8p, out of $1.1 billion, or 5.3p a share.
Idiv, never invested here as you know but am wondering whether as the disaster reveals itself regulatory issues are emerging. We know that the light touch of AIM means the market is caveat emptor big time but are your lawyers/advisers identifying any misrepresentation issues by directors, nomads, PR companies or regulators that could kick off a major civil/criminal action and by extension involve other rogue AIM companies. The meltdown in AIM - while fuelled by the commodities bust - has no political or press exposure that I can detect and yet thousands of investors must be losing squillions as Afren, Max and host of others rot and the directors and advisers salt their gains away.
Afren-There are more questions than answers The situation at Afren appears to get worse and I cant help but feel that there is something very suspicious going on here. I read with interest that leading oil trader Gunvor has expressed an interest in some of Afrens African assets which must be good news for the investors who may lose everything. However I also note that they have been given only until August 17th to come up with a bid on the assets they are interested in. How can it be possible to value and do even the vaguest of due diligence in a week, and also if the administrators are doing their job, surely any possible interest must be explored to the maximum benefit of all who have lost money? And they are saying its not a fire sale which doesnt rub with the above, unless they have other buyers in the wings The administrators appointed by the company are Alix Partners but maybe questions should be asked of the Ad Hoc Bondholders Committee and also why Blackstone are involved, who they report to and why? Oh well, im sure there is a totally innocent explanation - See more at: http://www.malcysblog.com/2015/08/oil-price-afren-and-finally-2/#.dpuf
On Friday, creditors approved Alix Partners plan to dismantle Afren and sell its assets. PJT Partners, which is running the auction, has already sold the Okoro offshore field for $31m to Amni International, one of Afrens former operating partners. Yinka Folawiyo Petroleum, another Nigerian producer, is set to pay $35m for the OML 113 reservoir.
Everything else is for sale. Bonhams will hold an auction on October 28 for the companys collection of African art. Restructuring specialist Hilco has been hired to sell the furniture. Industry sources said the assets were not likely to raise more than $200m in total, meaning that creditors face taking a huge loss on the $1.7bn in outstanding debt.
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