Seplat made payments to 18 companies associated with former Chairman Ambrosie Bryant Orjiako and former CEO Austin Avuru
Nigerian energy giant, Seplat was in the news for the wrong reasons last month after the oil and gas industry’s regulator, the Nigerian Upstream Petroleum Regulatory Commission rejected its bid to acquire American oil and gas multinational corporation, Exxon Mobil Corp.
Now, it is in the news again for even the worse reason, an alleged conflict of interest that led to the two founders spending over $450 million, about N193.5 billion through companies tied to the founders over a 12-year period.
According to a Bloomberg expose, Seplat “spent more than $450 million on goods and services provided by companies linked to its two founders over 12 years, most of it after the firm publicly listed in London and Lagos in 2014”.
The report showed that “Seplat Energy Plc made the payments to 18 companies associated with former Chairman Ambrosie Bryant Orjiako and former Chief Executive Officer Austin Avuru,” citing the firm’s annual reports.
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“The businesses supplied everything from drilling rigs to gift baskets, and some were connected to family members of the two men, the reports show,” the Bloomberg report showed.
According to the report, “The transactions started in 2010 and ended in 2021 when the board voted to phase out transactions with “related parties,” according to the annual reports.
“Payments to these companies peaked in 2014 at almost $106 million, or 13.6% of annual revenue. They exceeded a 10th of total income during 2015 and 2016, after which the volume of transactions declined, besides an uptick in 2019.”
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One of the founders, Avuru told Bloomberg in response to an inquiry over the matter that “he and his business partner founded the two biggest recipients of contracts with Seplat specifically to help the company meet its ambitious drilling targets and reduce logistical costs”.
Read the full report here