Home News Lekoil halts London trading on finding loan was ‘complex facade

Lekoil halts London trading on finding loan was ‘complex facade

by Business News Report

Trading in shares of Nigerian oil company Lekoil was suspended on the London Stock Exchange on Monday when the company said it had discovered that an announced $184 million loan agreement with the Qatar Investment Authority (QIA) was fraudulent. The suspension of shares in Lekoil, which first listed in London in 2013, were halted after an official with the QIA approached Lekoil to query the validity of the loan. “The loan agreement announced on 2 January 2020 by the company, purportedly with the Qatar Investment Authority 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,” Lekoil said in a statement on Monday evening.

A source familiar with the developments said the QIA first found out about the loan when Lekoil issued the statement on Jan. 2 and contacted the company immediately to tell them the loan was not legitimate. Lekoil said it had paid $600,000 to a company called Seawave Invest Limited, “an independent consultancy firm specialising in cross-border transactions with an exclusive focus on Africa”, as an initial arrangement fee to introduce it to people purporting to be the QIA. It said it had not paid anything to “the presumed counter-party.” Lekoil said trading of its shares in London would resume on Tuesday.

“The company will be contacting the relevant authorities across a number of jurisdictions without delay, with regard to what appears to be an attempt to defraud Lekoil,” the statement said.

Lekoil had planned to use the money to develop the Ogo field within Oil Prospecting Licence 310.

The company has a 40% stake in the Otakikpo field, which is producing 6,000 barrels of oil equivalent per day. It entered production in 2015, and Lekoil owns roughly 2,400 boepd of the output. There are more than 100 African companies listed on the LSE, including other Nigerian oil companies such as Seplat, which is dual listed in Lagos, and Eland Oil and Gas. But the LSE has had a troubled history with Nigerian oil companies. Nigerian oil firm Afren PLC was delisted from the exchange in 2015 after the company went into administration. Its chief executive and chief operating officer were convicted in 2018 of fraud and money laundering offences committed while working for the company. 

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