By LAW MEFOR

The backlash over the $19.4 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, 1^st Prince of Benevento, said they learnt nothing and forgot nothing. We not only repeat the same mistake, but also fail to heed warnings.

At page 42 of the document, Seplat reports: “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….” 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, same period of 2022, marking a 484.24 per cent 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, Mr. Roger Brown, the Board Chairman, Mr. 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 Mr. 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 Mr. Brown’s visa, work and resident permit.

Indicting Mr. 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 Mr. 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 – Dr. Charles Okeahalam, Professor Fabian Ajogwu, Basirat Odunewu, Fabian Ajogwu, Mr. Rabiu Bello, Ms Emma Fitzgerald, and Company Secretary/Legal Counsel, Mrs. 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 includes the cost of the lawsuit instituted by the Omiyi-led Board to stop the statutory Chief 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 10^th 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 Dr. 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 Mr. 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), Comrade 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 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 $19.4m 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 whooping $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 Mr. 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 firms? It will be good to know if any of the lawyers serves as an instrument or conduits 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 that actions of 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 Mr 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 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 minimal any reasonable nation can ask for in the present circumstance.

•Law Mefor, Ph.D., is a senior fellow of the Abuja School of Social and Political Thought – TAS, Abuja

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