Three top executives at African Petroleum PLC exit the company amidst allegations that the chairman is emasculating it via some improper trading and financial deals

The crisis at major indigenous oil firm, African Petroleum plc. deepened last week with the exit of its top hands, former Managing Director/Chief Executive Officer, Tunde Falasinu; Executive Director, Finance, Clement Aviomoh; and Company Secretary, Elizabeth Idigbe. The departure of the three top hands marked another sorry twist in the tortuous journey of AP over the last one decade. AP has not enjoyed management and operational stability since the Federal Government sold off its 30 per cent stake in it in 2000 to Sadiq Petroleum, SP, in a controversial privatisation exercise.

Since the transaction, AP has been stumbling from pillar to post. SP, chaired by businessman Peter Okocha, found out shortly after the sale that it had bought a pig in a poke. The Nigerian National Petroleum Corporation, NNPC, government’s major oil agency told the new SP management the troubled company was indebted to it to the tune of N26 billion and insisted it should pay up or that the debt be converted into equity.

Okocha found the alternatives unacceptable. In 2005, AP’s ownership reverted to the federal government. The Olusegun Obasanjo administration thereafter sold the company to Femi Otedola, chairman of Zenon Petroleum and Gas Company Limited, one of the leading suppliers of diesel, in yet another controversial transaction. Even that has not solved AP’s woes.

Since last year, Otedola, the AP chairman, has been in the news over an alleged N150bn debt to banks. His companies are said to have amassed huge debts. The creditors include UBA, which he allegedly owes N32bn and Zenith Bank, N22bn, as well as GTBank, Access and FCMB. The share price of AP, which at a point last year hit the N300 mark, traded at a meagre N31.61 last Tuesday. The quoted firm has not been able to hold its Annual General Meeting since 2008 and recorded a loss of N7bn last year. Otedola has been under intense pressure from banks to offset his debts, as the Central Bank of Nigeria steps on the throttle to enforce good corporate governance in the financial institutions. The parting of ways between the businessman and his former directors is believed to be rooted in the former’s resort to robbing Peter (AP), as it were, to enable him settle those debts.

In a six-page petition Aviomoh forwarded to the Nigeria Stock Exchange, the Securities and Exchange Commission and the Inspector General of Police, he heaps AP’s current precarious situation on alleged Otedola’s unprofessional approach towards running the company. The former AP ED. attributes the losses suffered by the oil company to certain sharp practices perpetrated by Otedola. He actually says the offences amounted to “fraud”. One allegation in the petition states that “in 2009, some of the companies belonging to Otedola, including Zenon Petroleum and Gas Company Limited, Fineshade Energy Limited and Platinum Fleet Limited, sold products to AP at prices higher than normal, at times higher than the retail price at gas stations, thereby resulting in losses to the company (AP).”

Aviomoh also claims that by September 2009, AP’s account reflected a loss of N9.7bn. To be sure of the true financial position of the company, Falasinu called in an engagement partner, Olufemi Abegunde, a former staff of Akintola Williams Deloitte. But instead of the loss figure, Abegunde reported a profit of N957mn. Falasinnu and Aviomoh were terribly miffed by what they considered a steady rape of AP. The former MD was brought into AP by Otedola two years ago on a three-year contract from Total. Aviomor, on the other hand, represents the interests of Afribank Nigeria plc, which owns about 16 per cent in the oil firm.

The stage for their exit presented itself last Monday. Otedola had called for a board meeting at the company’s headquarters on Broad Street to discuss the uneasy developments in the running of the oil company. Before then, Otedola and Falasinu’s path had crossed when the latter refused to accept three cargoes of what an inside source described as overpriced products imported by one of Otedola’s corporate interests. The chairman had been supplying the products for two years. The former AP MD had to put his foot down on the deal said to be sinking AP because the oil firm was compelled to reduce the price to consumers and sell at a loss while Otedola made hay from the transactions. Three weeks ago, when the matter was discussed at the AP board meeting, Falasinu was said to have insisted on rejecting the cargoes, whereupon Otedola threatened to sack him. Aviomoh, on the other hand, also went into the chairman’s bad books when he insisted that Otedola pay back a facility of N12billion he took from AP some 10 months ago ostensibly to supply products to AP. The products, an allegation goes, were never supplied while the facility had accrued a N3billion interest.

It was not unexpected that the environment for the board meeting would be very tense. Otedola was said to have arrived the AP headquarters accompanied by seven other directors and a contingent of over 100 armed policemen. A source confided in this magazine that he convinced the police he required their services as certain developments that might arise at the meeting could threaten national security. Incidentally, on his way to the boardroom, Otedola was trapped in a lift for over 30 minutes. Stuck in the lift with him were Osa Osunde, AP Vice Chairman; Layi Bolodeoku, Grace Ekpeyong, Segun Senbanjo, Josiah Wasa and Stanley Lawson. When they were eventually rescued and the chairman got to the boardroom, he was alleged to have accused Falasinu, Aviomoh and Idigbe of attempting to kill him. The meeting accepted Falasinu’s resignation as the CEO. Falasinu had informed Otedola weeks earlier that he no longer wanted to continue running AP. Just as the board ratified his resignation, it also suspended Aviomoh and Idigbe.

Last week, the crisis became a police affair, as Otedola accused the former top executives of AP of attempting to murder him. The police at Lion Building, Lagos interrogated the three ex-AP chiefs, in the presence of their lawyers. The investigation of the allegation continues this week.

A reliable source said Otedola has been desperate to paper the AP cracks because if the scandal eventually consumes him, he may well bid bye-bye to his political relationship with President Goodluck Jonathan as well as his political aspirations. The AP chairman is understood to be the national co-ordinator of Jonathan’s 2011 presidential campaign, pumping in huge financial resources, despite his huge debt profile with the banks.  Aviomoh’s petition may, however, seal that dream if the capital market regulators probing Otedola find him culpable of the allegations therein.

—Tayo Odunlami/Funsho Balogun