Seplat lavished $450 million in bogus transactions linked to Nigerian energy magnates Bryant Orjiako, Austin Avuru

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Seplat Energy Plc, Nigeria’s largest energy company, spent more than $450 million on goods and services provided by companies linked to Nigerian energy magnates Ambrosie Bryant Orjiako and Austin Avuru, who own significant stakes in the leading energy group.

Orjiako and Avuru, who co-founded Seplat Energy in 2009 with the collaboration of Shebah Petroleum Development Company and Platform Petroleum Joint Ventures, are credited with turning Seplat into one of Nigeria’s most successful indigenous oil and gas companies.

Since its inception more than a decade ago, the firm has grown into the largest listed energy group on the Nigerian Exchange, with a market capitalization of more than $1.7 billion and annual revenues in excess of $700 million.

According to Bloomberg, the energy group, which is set to acquire ExxonMobil’s oil and gas assets in Nigeria, spent more than $450 million over the past 12 years on goods and services provided by companies linked to its two founders.

According to its filings, $283 million of the $450.5 million in transactions that began in 2010 and ended in 2021 – when the board voted to phase out transactions with “related parties” – was paid since 2014, when the firm was listed on the London and Nigerian stock exchanges.

The payments were made to 18 companies linked to Seplat’s former Chairman Orjiako and former CEO Avuru, who supplied everything from drilling rigs to gift baskets. Some of the companies, according to reports, were connected to family members of the energy magnates.

Bloomberg noted that payments to these companies reached a high of nearly $106 million in 2014, accounting for 13.6 percent of revenue that year. They exceeded one-tenth of its total income in 2015 and 2016, after which the volume of transactions decreased, with the exception of an increase in 2019.

Avuru, who owns 8.4 percent of Seplat, stepped down as CEO in July 2020 and remained a non-executive director until this March.

Orjiako, who owns 6.4 percent of the company, stepped down as chairman in May. He will continue to assist Seplat with specific and critical external stakeholder engagements.

The energy magnates received $2.15 million in interim dividends as a result of their shares in the company in line with the board of directors’ announcement of an interim dividend of $0.025 per share.

The interim dividends, which were transferred electronically into shareholders’ bank accounts on Aug. 15, saw Orjiako and Avuru receive $945,463 and $1,206,204 from their equity shares, respectively, bringing their total dividend this year to $4.3 million.