AFR Business

The backlash over the $19.4m reported as professional legal fee in Seplat Energy’s half-year result presents us as a people in the cast of the French Bourbons of whom the French statesman and foremost diplomat, Charles-Maurice de Telleyrand-Périgord, 1st Prince of Benevento, said they learnt nothing and forgot nothing. We not only repeat the same mistake but also fail to heed warnings.

On page 42 of the document, Seplat reports: “General and Administrative (G&A) expenses amounted to $65.8 million, 42.0% higher than $46.4 million 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….” In fact, by Seplat’s own admission, professional and consulting fees stood at N14.13bn at the end of June 2023 compared to N2.42bn in the same period of 2022, marking a 484.24 percent hike.

However, some Nigerians, including this writer, spoke out a few months ago over the alleged impunity, corporate misgovernance, and racism at Seplat Energy PLC. In one of the articles, this writer stated that “the company has paid unprecedented legal fees, mostly on avoidable lawsuits”. But such Nigerians were harassed and even threatened with legal action by vested interests at Seplat. Instructively, this is no longer about someone alleging, but the company stating in black and white by itself that it was so wasteful of shareholders’ investments to the tune of $19.4m.

Unfortunately, before proceeding, Seplat did not tell Nigerians and its shareholders how those litigations, which were even clearly avoidable, came about. For instance, the lawsuit by some shareholders against the company’s CEO, Roger Brown; the board chairman, Basil Omiyi; and the independent non-executive directors (INEDs) in the federal high court Lagos. This began as unattended serious complaints by the Nigerian employees of Seplat, who accused Roger Brown of intimidation, bullying, and sacking of Nigerian staff of Seplat; intimidation of senior staff and members of senior management team; abuse of corporate governance, relegation of host communities, relocation of Seplat technology office to Aberdeen; bullying of Nigerian staff by foreign nationals; and refusal to fully relocate to Nigeria despite collecting huge amounts for that purpose, among others.

But the Omiyi-led board turned a blind eye. It didn’t matter that a survey by the company in the last quarter of 2022 showed acute staff dissatisfaction. It also showed acute staff dissatisfaction with company leadership. The aggrieved staff then petitioned the ministry of interior, which investigated the matter and eventually descended on Seplat Rogers and Seplat with sanctions and lawsuits. Among the sanctions was the revocation of Brown’s visa, work and resident permit.

Indicting Brown and declaring him a persona non grata, the ministry of interior’s letter to Seplat dated March 3, 2023, equally underscored the fact that Brown and Seplat breached the Nigerian Immigration Act 2015 and equally snubbed investigative hearing. It said that Brown claimed to “be unavailable even though we learnt he was in Abuja for other purposes at the time”. “As a result of these,” the letter continued, “the Honourable Minister has determined that Mr. Brown’s continued stay in Nigeria is contrary to national interest. Consequently, the Ministry has withdrawn the Work Permit CERPAC, Visa, Residence Permit and all relevant documents that authorised Mr. Roger Thomson Brown’s entry or stay in Nigeria”.

So, the second litigation, this time, an April 6, 2023, four-count criminal charge marked at the federal high court, Abuja, marked FHC/AB/CR/149/2023 Brown, Omiyi, and other INEDs – Charles Okeahalam, Professor Fabian Ajogwu, Basirat Odunewu, Fabian Ajogwu, Rabiu Bello, Emma Fitzgerald, and company secretary/legal counsel, Edith Onwuchekwa of breach of specified sections of the Immigration Act 2015.

Also, when you take a deep dive, you will find out that the bogus legal fees also include the cost of the lawsuit instituted by the Omiyi-led board to stop the statutory Anthony Idigbe-led audit committee of Seplat from investigating these controversies and profligacies, which the internal auditor reported were negatively affecting the company’s shares. When the committee would not adhere to Omiyi’s written directive to steer clear, they went to court to stop them, then proceeded to remove them through a kangaroo AGM on 10th May, and reverted to court to withdraw the lawsuits. Yet the Company and Allied Matters Act (CAMA) empowers the audit committee to, among others, authorise the internal auditor to carry out investigations into any activity of the company, which may be of interest or concern to the committee.

So, it could be seen that all these boil down to flagrant corporate misgovernance. Imagine the Omiyi-led board was alive to its duty. Imagine it took the employees’ concerns seriously as an independent and addressed them. There would not have been a lawsuit by shareholders over the mistreatment of Nigerian employees at Seplat. The Nigerian staff would not have petitioned the FG and there would have been no litigation.

Again, imagine that Omiyi and Charles Okeahalam had not continued to sit tight as INEDs on Seplat’s board. Section 12.10 of the Nigerian Code of Corporate Governance (NCCG) clearly provides that “the tenure for Independent Non-Executive Directors should not exceed three terms of three years each”, both are almost 11 years on the board and have refused to give way. Perhaps if they were not encumbered by their overstay and other patronages by management they would have been real watchdogs of shareholders’ investments and not Brown’s lapdog. And to think that a professor of corporate governance is on the board and in league with them seems to justify those who wonder if there is still hope for Nigeria.

The humongous “legal fee”

Back to the $19.4 (over N16bn) legal fee, I am happy that patriotic Nigerians are still speaking up and media houses with conscience have refused to be bought over. Only last Sunday, some shareholders of Seplat and civil society organisations led by Make a Difference Initiative (MADI) queried the legal fee and broke down the figures for the world to see the bleeding of Seplat before it is too late.

Breaking down the figures in their statement read by the national coordinator, Independent Shareholders Association of Nigeria (ISAN), Moses Igbrude, said: “This (the $19.4m spent in defending Brown) is in addition to about $4.7m (N4.8bn) 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 reads 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 $19.4m represents 23 per cent of the company’s closing profit of $82.6m 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 £3.6m or $4.7m (N4.8bn) in the same period is added to the $19.4m professional fees, it comes to about $24.1m, 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.

“It is quite baffling for Seplat to claim to have spent a whopping $19.4 in such a short period (of less than four months) defending a foreign national accused of breaching the Nigerian Code of Corporate Governance, flouting our laws, indicted of racism against Nigerians on our own soil.”

Meanwhile, one cannot but join the shareholders and MADI in wondering if Brown is worth all the money and trouble.

Still on the call for investigation

Furthermore, one cannot also but join the shareholders and MADI in earnestly calling on the President to direct the Financial Reporting Council of Nigeria (FRC) and Security and 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. Imagine a situation where the Corporate Affairs Commission (CAC) does not recognise the resolutions passed during the controversial May 10, 2023, AGM in deference to a court order, yet they are operating normally.

Also, there is a need for a probe panel composed of the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences Commission (ICPC) etc. to investigate questioning issues around the N16bn legal fees. How much of the $19.4m (N16bn) was paid to lawyers and how much was paid to each lawyer or law firm? It will be good to know if any of the lawyers serves as an instrument or conduit for compromising the judiciary in any way, especially given the questionable court injunctions and vacation of court orders in favour of Seplat.

Importantly also, Nigerians deserve to know why the criminal charges (FHC/AB/CR/149/2023) instituted against Seplat CEO, Roger Brown, and Seplat Board were suddenly withdrawn and Brown’s visa, work, and resident permit restored without any explanation to Nigerians. Ironically, it was even the embattled company that triumphantly announced the actions of the immigration and ministry of interior to Nigerians.

We need to know why the FRC and SEC have relapsed into a silent mode despite apparent breaches of good governance code by the Basil Omiyi-led Seplat board. Why have Omiyi and Okeahalam continued to sit tight in clear breach of Section 12.10 of the NCCG while the FRC look away? Why is SEC silent on the flagrant infringements on the statutory audit committee of Seplat, including Omiyi’s written order directing the committee not to investigate breaches and the forcing out of the committee chairman and a member for insisting on doing the right thing? Are they observing table manners at the expense of the investing public?

Of course, if a meaningful probe will be carried out, Brown, Omiyi, and the INEDs will have to step down independent non-executive directors for an unhindered exercise to save Seplat.

By the way, these are the minimum any reasonable nation can ask for in the present circumstance.

Law Mefor, PhD, is a senior fellow of the Abuja School of Social and Political Thought – TAS, Abuja

Following the expiration of the seven-day ultimatum given to the Niger military junta by the Economic Community of West African States (ECOWAS) to restore the constitutional order which they overthrew on July 26, ECOWAS leaders at their meeting on Thursday, August 10, in Abuja decided to activate the option of raising a military force to intervene in Niger.

Effectively this means that at some point in the coming weeks, if ongoing diplomatic efforts and sanctions on the Niger coupists do not yield the desired results, ECOWAS boots will be inserted in Niger to enforce the removal of the military government and restore the ousted civilian President Muhammad Bazoum to power.

When he was elected chairman of ECOWAS on July 9 at the summit of heads of states of the regional bloc in Guinea-Bissau, one of the declarations President Bola Tinubu made was that during his tenure coups and violent overthrow of constitutional governments will no longer be tolerated in the sub-region.
Fortuitously President Tinubu has been presented with an opportunity to test that resolve in Niger with the coup coming two weeks after he made the declaration. Thus what we see happening presently with ECOWAS is a manifestation of what President Tinubu has pledged to do.

In this regard, it is almost certain that President Tinubu will go the whole hog if necessary to remove the coupists in Niger in fulfilment of that pronouncement. Indeed the robust response of ECOWAS from the statement condemning the coup to the ultimatum given to them, to the high-powered delegations despatched to talk to them about reversing their actions, and to the punishing sanctions applied to the regime definitively indicates that President Tinubu intends to walk his talk. This is in sharp contrast to the mild actions taken against the coups that took place in Mali, Burkina Faso and Guinea.

However it does appear that both in the present circumstances in Niger and into the future, the scope of the Tinubu declaration would need to be expanded and concretised into a doctrine that would not be about preventing coups and removing coupists from power alone, but more fundamentally about compelling and committing foreign powers to the development of Nigeria and the West African sub-region.

It is observed that presently in the Niger quagmire, there are powers whose underlying interests may not necessarily be about restoring democracy in that country but will stand to gain more from the interventions of the Tinubu-led ECOWAS.

France and the United States of America, in particular, with deep interests in Niger and stymied by circumstances from intervening directly would be more than happy to piggyback on Tinubu’s actions in Niger at comparatively little cost to them. Should Tinubu and ECOWAS succeed in Niger, the French would have their uranium and crude oil concessions saved and the Americans will retain their drone military base and 1000 strong forces.

Nigeria and ECOWAS, on the other hand, will be left with casualties including body bags, walking wounded and huge humanitarian, logistical, infrastructural and food challenges that will be with us for a long time to come. Because Nigeria is currently at the forefront of the action and will likely constitute the larger number of troops and possibly the staging point for any possible military action, for which the French and Americans will benefit more eventually, effectively taking the brunt, we are entitled to demand what is in it for us.

It is from this direction that the Tinubu doctrine should be approached and this requires a heavy dose of Real Diplomatique. In diplomatic circles, it is often said that one should not allow a crisis to go to waste. The Niger situation offers just such an opportunity for President Tinubu to achieve not just his declaration of preventing coups in the sub-region, but also getting the American-led Western countries to commit to a whole new deal for Africa across political, economic and social spheres of life. This was done in Europe with the Marshal plan and something similar in Southeast Asia in Korea, Indonesia, Taiwan, Singapore, Philippines etc.

If the French and Americans are really interested in developing a partnership with Africa in defending and strengthening democracy and more fundamentally in preventing their interests from falling into the hands of adversaries who are encroaching into the African sphere, then they should literarily put their money where their mouths are.

As the French and Americans stand to be the main beneficiaries of the Tinubu-led ECOWAS action in Niger, there should be something concrete on the table for their involvement in this endeavour. For this, West Africa should be marked out as a special intervention area for political, economic and assistance by France and America.

As a first step in this direction, America should wipe out or convert the debts and loans owed by West African states into grants in aid to ease the burden of the balance of payment they bear. Similarly, both France and America should work out currency reforms that would ease our exchange rate difficulties against their currencies.

There should also be a huge infrastructural fund for the building of roads and railways linking up West African states; power grids to provide power linkage throughout the region. America and France should also commit to strengthening existing and if possible creating new trade agreements that would allow greater access for export goods from West African countries into their economies.

All these should constitute the elements of the Tinubu doctrine which should form the basis of a quid pro quo relationship with France and America whose interests the Tinubu-led ECOWAS is now pursuing in Niger and which these two countries stand more to gain. Let us not fall for the flattery and rhetoric of the French and Americans. This is the real deal for Nigeria and ECOWAS in the Niger situation.