“This is the Height of Profligacy”: Shareholders Call for Sack of Seplat CEO, Directors Over $19.4m Legal Fee

Aug 8, 2023 | Entertainment, News

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  • A group and shareholders want Roger Brown, Seplat Energy CEO, and directors sacked over a $19.4 million professional legal charge
  • The group of shareholders and CSO want an immediate investigation into the recent financials of the company
  • In addition, they want to know the reasons behind the withdrawal of criminal charges against Seplat’s CEO

Shareholders of Seplat Energy Plc and Make a Difference Initiative (MADI)-affiliated civil society organisations have been accused of wrongdoing concerning the $19.4 million professional legal charge in the energy company’s half-year report.

They also asked Roger Brown, the CEO of SEPLAT, and the independent non-executive directors to be fired immediately or removed from their positions so that an unbiased inquiry into the corruption at Seplat could be conducted before it was too late.

Seplat Energy, Roger Brown
Chief Executive Officer of Seplat Energy, Roger Brown
Photo Credit – Seplat Energy
Source: Facebook

The organisation is also pleading with President Bola Tinubu to immediately investigate claims that the business’s board violated the Nigerian Code of Corporate Governance (NCCG) to save the company from going down.

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This came after Seplat Energy PLC announced that its Roger Brown stepped down from office. This follows an order from a Federal High Court in Lagos restraining Brown from parading himself as the firm’s CEO.

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Also, the Ministry of Interior revoked Brown’s work permit, visa, and residence permit. But, Court later struck out suit against seeking the removal of Brown.

Group accuses Seplat of flouting rules

This Day reported that The parties made the proposals during a joint news conference led by Lemmy Ughegbe, executive director of MADI, and Comrade Moses Igbrude, national coordinator of the Independent Shareholders Association of Nigeria (ISAN).

Given that Seplat claims to have spent an outrageous $19.4 million in just four months to defend a foreign national accused of breaking our laws, the Nigerian Code of Corporate Governance, and accusing Nigerians on our own soil of racism, they described the situation as unfortunate and puzzling.

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They argued that Seplat’s admissions in its half-year report had supported their earlier worries and legal challenges to the alleged bad governance of the company.

They also probe into the dismissal of criminal charges that was made against Seplat’s Board and the restoration of Brown, the company’s CEO, immigration documents.

The group stated:

“Today, the admission by Seplat in its 2023 half year (H1) result that the company squandered a incredible $19.4million (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 on top of the about $4.7 million (N4.8 billion) in share bonuses that Mr. Roger Brown accrued during the same time period in addition to his pay and other benefits.

Seplat’s financial report for H1

The group highlighted the firm’s H1 report, which showed that G&A costs were $65.8 million, 42.0% more than the $46.4 million spent in 6M (H1) of 2022.

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Due to the unprecedented and intense period of court cases brought by minority shareholders, the rise in G & A expenditures was primarily caused by professional fees related to litigation costs.

It was noticed that the $19.4 million equals 23% of the $82.6 million closing profit reported on page 10 of the H1 report by the corporation.

The group also claimed that when the $19.4 million in professional fees are combined with Brown’s Long Term Incentive Plan (LTIP), which consists of 2,779,181 shares worth £3.6 million or $4.7 million (N4.8 billion) in the same period, the result is roughly $24.1 million, or 29% of the company’s first-quarter net profit.

“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 entirety,”

The group said:

The stakeholders therefore requests that President Bola Ahmed Tinubu instruct the Financial Reporting Council of Nigeria (FRC) and Security and Exchange Commission (SEC) to perform their duties by enforcing sanctions and conducting in-depth investigations into the ongoing violations of corporate governance standards in order to save Seplat and the investments of Nigerians and foreign investors from going to waste.

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The group added that the resolutions adopted during the contentious May 10 AGM are not recognised by the Corporate Affairs Commission (CAC), but the firm continues to run as usual.

In order to investigate the circumstances surrounding the alleged N16 billion in legal fees and other related Seplat Energy Plc. issues, the group requests that the President form a probe panel composed of representatives from the Independent Corrupt Practises and Other Related Offences Commission (ICPC), the Economic and Financial Crimes Commission (EFCC), and other relevant agencies.

“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.”

Naira devaluation triggers currency loss, as Seplat Energy posts $85m profit in 6 months

Legit.ng had earlier reported that the company reported that Seplat Energy posted $85 million profit in the first half of 2023 despite improving revenue by 3.8% to $547.0 million.

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The amount shows a 59.3% decline in profit before tax despite an increase in revenue for the period compared to the $209.9 which it reported in the first six months of 2022.

The company in its financial statement filed to the exchange and seen by Legit.ng admits that operating profits in the period were impacted by lower oil prices and other items, most notably the non-cash impact of the devaluation of the Nigerian Naira.

Source: Legit.ng



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