Legal Business Blogs

Calling in the regulator: Willkie Farr investigation prompts client to report itself to the SFO

A report delivered by Willkie Farr & Gallagher into expenses payments at struggling oil explorer Afren has led the client to notify itself to the Serious Fraud Office (SFO) over the findings.

Afren said in a statement that it had notified the regulator of the investigation into ‘the hire of an individual within its operations in 2012 and the payment of certain travel and accommodation expenses connected to Afren’s activities’.

In a statement today (23 March), the SFO said it was ‘aware of the matters referred to it’.

The investigations team at Willkie Farr, which was led by its London head of litigation, compliance and white-collar crime Peter Burrell, conducted the independent review carried out by the firm after a whistleblower reported to Afren’s management.

The firm’s original review into transactions at the firm resulted in the dismissal of chief executive and founder Osman Shahenshah and chief operating officer Shahid Ullah in October for gross misconduct. The investigation discovered that the pair were involved in Afren failing to comply with reporting obligations under listing rules and that they controlled a special purpose vehicle, which was used to pay bonuses.

At the start of 2015, Afren announced that the pair would pay a $17.1m settlement, plus $3m in legal costs, to exclude them from future litigation with the company. Two other directors have also been dismissed since Willkie were called in.

Afren said in a statement: ‘The company has taken steps to halt its previous practices in relation to such expenses payments. Willkie has been tasked with improving the company’s implementation of improved internal compliance procedures and as a result of whistleblower reports received by the company’s management, the company engaged the firm to assist it with its review of its compliance with such procedures. Willkie Farr has undertaken a substantial review of such matters, which is still ongoing but which is almost complete, save for some follow-up work in relation to these two issues.’