$600,000 scam: Nigerian firm removed from London’s junior AIM market

A Nigerian oil company, LekOil, is currently in the eye of the storm over an alleged scam of $600,000 involving a consultancy firm, Seawave Invest.

The Guardian (UK) reported that the company revealed the alleged scam after handing over the money to the consultant, who had promised to help arrange a loan from the Qatari Investment Authority.

Earlier in the month, the small oil firm revealed the $184 million (£142m) loan agreement to its investors.

But, things took a dangerous turn at the weekend when representatives from the Qatari fund approached the oil firm to question “the validity” of the deal.

Consequently, shares in the company were immediately pulled from the London’s junior Aim market, where it is listed.

The AIM is a sub-market of the London Stock Exchange, which was launched on June 19, 1995.

It allows companies that are smaller, less-developed, or want/need a more flexible approach to governance, to float shares with a more flexible regulatory system than is applicable on the main market.

The PaymentDetails showed that Lekoil paid an initial arrangement fee of $600,000 to Seawave Invest, which is registered in the Bahamas, for introducing Lekoil’s advisers to individuals said to be from the QIA to discuss the loan.

Reports said lawyers from Lekoil sought to find the “full facts of this matter” while the company said it “will be contacting the relevant authorities across a number of jurisdictions without delay” to report “what appears to be an attempt to defraud” the company.

“While Lekoil will take all reasonable actions to recover the fees paid to Seawave, there can be no guarantee that such attempts will be successful,” the company added.

The company said it will set up an investigation committee, spearheaded by its new non-executive directors, Mark Simmonds and Tony Hawkins, the chief executive of Columbus Energy Resources.

While Mr Simmonds served as a former minister in David Cameron’s government, Mr Hawkins joined the company’s board just days after the loan was agreed.

The total loan fees, payable to Seawave and the QIA, were expected to reach almost $10 million, leaving just over $173 million within the loan facility to fund Lekoil’s plans for oil exploration in Nigeria.

The whole loan deal, according to sources, have all elements of advance fee fraud.

For instance, the purported QIA facility came with a proposed interest rate of 3.72 per cent, which would have been substantially below those of Lekoil’s peers’ borrowings.

Lekoil said it had paid around $600,000, in advance fees, to Seawave and in legal costs. The deal was supposed to see it raise $184 million, of which it would receive $174.3 million. The $9.7million difference was to go to Seawave and with an upfront fee of 2.75 per cent of the facility, or $5.06 million.

Seawave is a company that claims to be based in Ghana, listing a telephone number for some lawyers in Bahamas.