AIM-listed Nigerian-headquartered oil explorer Lekoil has temporarily suspended trading of its shares following a loan scandal involving a company that claimed to be working for Qatar Sovereign Investment Fund.
A report by Alliance news indicated that the oil producer made preliminary arrangements with a company purporting to be representing Qatar Investment Authority to receive a $184-million loan in the month. The funds were meant to finance the development of offshore fields in Nigeria.
Lekoil, which is currently at the surveillance stage for the upcoming oil fields, was last week paid a visit by the Qatar bank after news of the fraud emerged. The officials got wind of the situation and sort to clear things with Lekoil, hardly a week after finalising the paperwork for the applied loan.
In the end, it turned out the Qatar Investment Authority was not aware of any loan applied by Lekoil.
In a statement, the company said: “Lekoil is urgently seeking to establish, alongside its legal counsel and nominated adviser, the full facts of this matter, and pending this clarification, the company has requested that its ordinary shares be suspended from trading on AIM with immediate effect.”
The company’s 2019 first half-year report (unaudited statement) shows revenues of $22.290 million, down from the previous year’s $22.387 million. Operating expenses sharply rose from 2018’s $1.110 to 2019’s $4.267.
During the same period in 2018, Lekoil recorded a net profit of $1.763 million, while last year saw the oil producer close the first six months with a net loss of $5.183 million.
Meanwhile, Financial Times published a report saying the loan involved a firm by the name of Seawave Invest, based in the Bahamas. The intermediary company linked Lekoil with another firm, which it said, was an agent of the Qatar Investment Authority. According to Lekoil, the firm “constructed a complex facade to masquerade as representatives” of the fund. It further claimed it had already paid $600,000 to Seawave invest.
Financial Times said this was not the first time a Nigeria-associated company was involved in similar problems. Sometime in 2018, Lekoil’s partner in one of its largest oil field in Ogo, Afren, was found guilty of money laundering.
Lekoil commands 40% of the Ogo oil fields and wholly owns Afren. But the company is said to be looking to dispose of about 22.86% of its share in Afren.