From: Godwin Tsa, Abuja
Some shareholders of Seplat Energy PLC and civil society organisations under the aegis of Make a Difference Initiative (MADI) have called on President Bola Tinubu to direct the anti-corruption agencies to investigate the N16 billion professional legal fee allegedly paid by the company to lawyers handling their court cases.
The groups who alleged foul play in the $19.4m professional legal fee published in the half-year report of the energy company, further called for the the immediate probe of alleged breaches of the Nigerian Code of Corporate Governance (NCCG) by the company’s Board to “save the company from going down”.
They also demanded “the immediate resignation or removal of SEPLAT CEO, Roger Brown, and Independent Non-Executive Directors to ensure an unimpeded investigation into the rot in Seplat before it is too late”.
The groups made the demands at a joint press conference addressed by the National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Comrade Moses Igbrude and Executive Director of MADI, Lemmy Ughegbe, describing as “unfortunate and baffling” a situation a situation where Seplat “claims to have spent a whooping $19.4 in such a short period of less than four months defending a foreign national accused of breaching Nigerian Code of Corporate Governance, flouting our laws, indicted of racism against Nigerians on our own soil”.
They also called for the probe of the withdrawal of criminal charges against Seplat’s Board and restoration of the immigration documents of the company’s CEO, Mr. Roger Brown, saying the admissions by Seplat in its half-year report had justified their earlier alarms and lawsuits challenging alleged misgovernance of the company.
“Today, the admission by Seplat in its 2023 half year (H1) result that the company squandered a incredible $19.4m (approximately N16bn) as professional legal fees to defend its Chief Executive Officer (CEO), Mr. Roger Brown in the lawsuits against him by shareholders vindicates us. This is in addition to about $4.7m (N4.8bn) in share bonus accrued to Mr Roger Brown during the same period over and above his salaries and other allowances during this period.
“For the avoidance of doubt, the H1 results reads in part: “General and Administrative (G&A) expenses amounted to $65.8million, 42.0% higher than $46.4million incurred in 6M (H1) of 2022. This increase in G & A cost was mainly due to professional fees associated with the litigation costs in response to the unprecedented and intense period of minority shareholder actions through the courts….”
“Very sadly, this $19.4m represents 23 per cent of the company’s closing profit of $82.6m declared at page 10 of the H1 report. When Mr, Roger Brown’s Long Term Incentive Plan (LTIP), which is 2,779,181 shares, an equivalent of £3.6m or $4.7m (N4.8bn) in the same period is added to the $19.4m professional fees, it comes to about $24.1m, representing 29 per cent of the company’s net profit in H1. Yet, Seplat has been beating its chest for declaring a total dividend $17.6m for its shareholders for Q2 (second quarter). This is the height of profligacy and we condemn it in its entire.
“Worse still, the issues that necessitated the legal action are yet to be addressed, but instead exacerbated”, the joint statement read by Igbrude said.
On their demand, the groups said: “We earnestly call on President Bola Ahmed Tinubu to direct the Financial Reporting Council of Nigeria (FRC) and Security and Exchange Commission (SEC) to do their jobs by taking disciplinary actions and carrying out a thorough investigation into the perpetual breach of corporate governance codes to save Seplat and the investments of Nigerians and international investors from going down the drains. As we speak now, the Corporate Affairs Commission (CAC) does not recognise the resolutions passed during the controversial May 10 AGM, yet they are operating as if everything is normal.
“We also urge the President to institute a probe panel composed of the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences Commission (ICPC), and other relevant bodies to investigate the circumstances surrounding the so-called N16bn legal fees and other related matters in Seplat Energy PLC.
“We want to know how much of the senseless N16bn professional legal fees was actually paid to lawyers handling the cases. Nigerians and the investing public deserve to know who the lawyers are and how much was paid to each lawyer or law firms.
“Did those lawyers in any way serve as conduits for any unholy compromises in the legal tussles that resulted in the questionable court injunctions and vacation of court orders in favour of Seplat? For instance, the Federal High Court injunction in Suit No. FHC/ABJ/CS/726/2023 was discharged on Motion Ex-parte by the Court of Appeal in less than 48 hours of filling by Seplat without giving the Respondent the opportunity to respond.
“What informed the sudden withdrawal of criminal charges (FHC/AB/CR/149/2023) instituted against Seplat CEO, Roger Brown and the INEDs as well as the restoration of Roger Brown’s visa, work, and resident permit by the Nigerian Immigration Service and Ministry of Interior without any explanation to the public or the endangered Nigerian employees in Seplat whose petition led to the investigation in the first place? Why were such important decisions hurriedly and surreptitiously taken immediately after the Minister left office at the end of the previous administration?
“Equally worthy of investigation is the silence, inaction, and any complicity of the FRCN, SEC, etc. in the face of the serial breaches of the Nigerian Code of Corporate Governance (NCCG) by the Mr Basil Omiyi-led Seplat Board. For instance, Omiyi and Dr. Charles Okeahalam have stayed over 10 years as INEDs on Seplat Board, way beyond the maximum of nine years prescribed by the NCCG to refresh Boards and minimise threats to Board independence”.