Afren Reaches $20.1 Mln Settlement Over Claims Against Former CEO, COO

(RTTNews) - Africa-focused oil and gas company Afren Plc (AFRNF.PK, AFR.L) announced Monday a $20.1 million settlement with its former Chief Executive, Osman Shahenshah, and former Chief Operating Officer, Shahid Ullah, related to claims regarding the unauthorized payments.

The company said it has secured a cash payment of $17.1 million regarding payments made to the two former executives that were not authorized by the board.

The company also secured an additional $3 million related to costs incurred by it on independent reviews conducted by Willkie, Farr & Gallagher (UK) LLP, KPMG and certain legal costs.

Shahenshah and Ullah have also granted a non-competition covenant in favor of Afren. The settlement deal will also see Shahenshah and Ullah being released of all claims regarding the unauthorized payments.

Further, the company has decided not pursue legal proceedings against Shahenshah and Ullah in relation with the claims relating to the unauthorized payments.

The company initially temporarily suspended the two executives on July 31 after it found evidence of the receipt of unauthorized payments potentially for the benefit of the two of them. The company later on October 14 decided to terminate the employment and directorships of Shahenshah, Ullah, and two associate directors Iain Wright and Galib Virani, with immediate effect.

The company then initiated legal proceedings against Shahenshah and Ullah, to recover sums in respect of such unauthorized payments.

In London, Afren shares are currently trading in Monday's regular trading session at 45.93 pence, down 1.35 pence or 2.86% on a volume of 1.83 million shares.