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Seplat: Shareholders call for legal fees probe

Some shareholders of Seplat Energy Plc and civil society organisations under the aegis of Make a Difference Initiative (MADI) have alleged foul play in the $19.4 million professional legal fee published in the half-year report of the energy company, calling on President Bola Tinubu to direct 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 where Seplat “claims to have spent a whopping $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.”

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 where Seplat “claims to have spent a whopping $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 an 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 in addition to about $4.7million (N4.8 billion) 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 read 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 $19.4million represents 23 per cent of the company’s closing profit of $82.6million 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 £3.6million or $4.7milion (N4.8billion) in the same period is added to the $19.4million professional fees, it comes to about $24.1million, 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 entirety.

“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 Source Offences Commission (ICPC), and other relevant bodies to investigate the circumstances surrounding the so-called N16billion legal fees and other related matters in Seplat Energy Plc.

“We want to know how much of the senseless N16bn professional legal fees were 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 firm.”

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