(Reuters) – Two former executives of collapsed oil company Afren were sentenced to up to six years in prison on Monday after they were convicted of fraud and money laundering over a $300 million business deal, Britain’s Serious Fraud Office (SFO) said. Former Afren Chief Executive Osman Shahenshah and former Chief Operating Officer Shahid Ullah laundered more than $45 million, some of which was used to buy luxury properties in Mustique and the British Virgin Islands, the SFO said.
“The significant sentences reflect the seriousness of this fraud. Shahenshah and Ullah violated their duties and their employees, the board of directors and shareholders paid the price,” Lisa Osofsky, the director of the SFO, said here in a statement. While the executives have been sentenced to a total of 30 years in jail, the terms will be served concurrently. Shahenshah, who was also the co-founder of Afren, will serve six years, while Ullah will serve five years, the SFO said. Shahenshah’s solicitor David Grant said he would seek leave to appeal as soon as possible against the convictions.
“We will argue in the Court of Appeal that the SFO has fundamentally misconstrued this offence,” Grant said in a statement. This was, in the judge’s own words, an “exceptional case” in that absolutely no loss at all resulted to Afren Plc from the transactions which were in dispute…” he said. A legal representatives for Ullah did not immediately respond to a request for comment. A spokeswoman for the SFO said the two men were sentenced on Monday morning and would start the sentence on the same day, as is normal procedure when custodial sentences are given.
The criminal investigation began in June 2015 following a self-report by Afren, while the defendants were charged with four offences in September last year. Shahenshah and Ullah created shell companies and agreed a side deal with one of Afren’s Nigerian oil partners from which they would benefit, without the knowledge of Afren’s board, the SFO said. The two men, who did not enter a plea, were found not guilty at Southwark Crown Court on a separate charge relating to a management buyout of another of Afren’s business partners. Afren went into administration in July 2015 after failing to secure support for a refinancing and restructuring plan.
