Afren Plc said it had secured $17.1 million from its former chief executive and chief operating officer Osman Shahenshah and Shahid Ullahin respectively in relation to unauthorised payments that caused a scandal last July (2014). Both men were sacked in 2014 after the received evidence that they had both received unauthorized payments. Two associate directors were also fired whilst seven more employees were disciplined for gross misconduct. Here is the press release from Afren;
Afren plc (“Afren” or the “Company”) announces that it has successfully secured, from its former CEO, Osman Shahenshah, and former COO, Shahid Ullah, a cash payment of US$17.1mn in relation to payments made to them that were not authorised by the Board, and as first announced by the Company on 31 July 2014. In addition, the Company has secured a further US$3mn in respect of the costs to the Company relating to independent reviews conducted by Willkie, Farr & Gallagher, KPMG and certain legal costs. Mr Shahenshah and Mr Ullah have also granted a non-competition covenant in favour of Afren.
Afren has entered in to settlement agreements with Mr Shahenshah and Mr Ullah which release them of claims relating to the unauthorised payments. As a result of such settlement, the Company has agreed not to pursue legal proceedings against Mr Shahenshah and Mr Ullah in connection with the claims relating to the unauthorised payments.
Cost of Investigation
Afren said it “secured a further $3 million” to cover the costs of the investigation and “certain legal cost”. This makes me wonder what sort of investigation and legal reviews will be costing the company as much as $3million!!! The amount seems high at first glance and would be interesting to know what exactly makes up that cost.
