Lekoil advisers ‘should have detected £144m fake loan’
2 March 2020, 09:04
The business said an outside consultant did not raise any red flags.
Lekoil, the oil company that was fooled into thinking Qatar would lend it 184 million US dollars (£144 million), has hit out at a consultant whose “inadequate” due diligence report did not raise obvious red flags.
Lekoil, which is listed in London, said that it had hired a “third-party global risk consultant” to look into Seawave Invest, which Lekoil says introduced it to “individuals falsely purporting to represent” the Qatari sovereign wealth fund QIA.
However, it was only after Lekoil had signed a multimillion-dollar loan deal, and handed 450,000 dollars (£351,000) to Seawave, that the company discovered what it says was a fraud.
On Monday Lekoil said that the consultant’s report did not identify any red flags on Seawave or its principles.
It did not name the consultant, however the Times has previously reported it to be Control Risks, which has dozens of offices around the world. Control Risks has been contacted for comment.
“The fraud, whilst relatively elaborate and sophisticated, should have been capable of being detected by parties engaged to advise on the facility agreement, internally or externally, prior to its execution,” Lekoil said.
Lekoil said that its chief executive had led negotiations with “individuals falsely purporting to represent the QIA”. The board later approved the deal.
It added that there is “no evidence of any complicity of any Lekoil director or employee in the fraud”.
Lekoil announced the deal in early January, but was later forced to admit it had been fooled after it was approached by Qatari representatives.
Lekoil said it has now taken steps to recover the money paid to Seawave, and has written to the Bahamas-based company and its principals Bismarck Abrafi and Said Memene.
The business also said it had written to “the purported representative of the QIA”, Rilk Dacleu Idrac.
Lekoil’s non-executive chairman Samuel Adegboyega said: “First of all, I would like to thank the committee for leading the review and the provision of the detailed findings to the board. The board will seek, as a priority, to improve its standards of corporate governance and we welcome the recommendations received from the committee, which are in the process of being implemented.”