Afren Plc

On the 24^th of October 2018, Osman Shahenshah and Shahid Ullah, former Chief Operating Officer and Chief Executive Officer of Afren were convicted of fraud and money laundering charges over Nigerian oil deals worth $300m.

The SFO’s investigation began in June 2015, with charges announced against the two men on September 27^th 2017. It focused on oil business deals, with Mr Shahenshah and Mr Ullah both accused of hiding financial transactions relating to those deals from the Afren board of directors.

Mr Shahenshah and Mr Ullah created shell companies and agreed a side deal, with Afren’s oil field partner in Nigeria, from which they anticipated personal gain, without the knowledge of the Afren board of directors.

Shahenshah and Ullah recommended that the Afren Board agree to a $300m payment to Oriental Energy Resources Ltd, the company’s oil field partner in Nigeria. Unknown to the Afren board, Shahenshah and Ullah had struck a side deal with Oriental which led to 15% of the $300m was then paid out to a Caribbean shell company controlled by the defendants. The men then used the $45m to purchase luxury properties in Mustique and the British Virgin Islands. A smaller portion of the $45m laundered was split between Oriental employees and a close network of Afren staff dubbed ‘The A Team’.

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

Osman Shahenshah and Shahid Ullah were both found guilty of the following offences:

• One count of fraud by abuse of position, contrary to sections 1 and 4 of the Fraud Act 2006
• One count of money laundering, contrary to section 328 of the Proceeds of Crime Act 2002.
• One count of money laundering, contrary to section 329 of the Proceeds of Crime Act 2002.

They were acquitted on one count of fraud by abuse of position, contrary to sections 1 and 4 of the Fraud Act 2006.

Sentencing

On 29 October 2018 at Southwark Crown Court, His Honour Judge Gledhill QC sentenced the defendants as follows.

Osman Shahenshah, former co-founder and Chief Executive Officer of Afren received:

• 6 years jail for one count of fraud, contrary to section 1 of the Fraud Act 2006
• 6 years concurrent for one count of money laundering, contrary to section 329 of the Proceeds of Crime Act 2002
• 4 years concurrent for one count of money laundering, contrary to section 328 of the Proceeds of Crime Act 2002.

Shahid Ullah, former Chief Operating Officer of Afren received:

• 5 years jail for one count of fraud, contrary to section 1 of the Fraud Act 2006
• 5 years concurrent for one count of money laundering, contrary to section 329 of the Proceeds of Crime Act 2002
• 4 years concurrent for one count of money laundering, contrary to section 328 of the Proceeds of Crime Act 2002.

Appeal

Osman Shahenshah sought leave to appeal his conviction and sentence. At a hearing at the Court of Appeal on 24 July 2019, Lord Justice Gross, Mr Justice William Davis and Mr Justice Andrew Baker refused leave to appeal the conviction and the sentence.