The news which broke on Wednesday March 8, 2023 that Roger Brown, the expatriate CEO of Nigeria’s pre-eminent oil and gas independent has had his visa and work permit revoked hit the nation, the oil industry and world markets like a sledgehammer .
The British born banker turned oil industry leader was accused, according to news reports monitored by Thisislagos “of racism, favouring of foreign workers, and discriminating against Nigerian employees levelled against him by employees of the company.”
But in a swift reaction, the Seplat board has come out with a strong response in support of their embattled CEO.
According to a statement signed by Board Chairman, Basil Omiyi, “Seplat Energy wishes to refute the false allegations against Brown, which have been presented to the Ministry of Interior and the public by certain petitioners, and which have not been brought to the attention of Roger Brown or Seplat Energy for a reaction…The orchestrated media reports are clearly calculated to spread false information. Seplat Energy will be engaging with the Ministry to reject the impressions created by these allegations.”
The statement added further that the board believes that the allegations are “a spurious and vindictive reaction to the enforcement of corporate governance standards in the company.” Continuing, it added that “Brown has earned an unblemished record of service and leadership in the company…He will continue to work from the UK office.”
From information gleaned from Seplat’s corporate governance processes, Roger Brown is not in a position to “favour foreign workers” or “discriminate against Nigerians” especially when viewed from the fact that in Seplat, appointments and remuneration are not handled by the CEO. What he can offer, is at best suggestions which may be accepted or rejected by the Remuneration Committee or REMCO which is chaired by the Senior Independent Executive Director (SINED). Seplat as per its 2022 annual report employs 596 people and while the number of expatriates is not listed, the website informs us that the expatriates are drawn from five different nationalities.”
On the allegations of racism, the Human Resources committee and Business Integrity Department should have investigated and made suggestions to the board.
Regarding the charge that Mr. Brown was “in possession of a Combined Expatriate Residence Permit and Aliens Card (CERPAC) not based on a valid Expatriate Quota” an industry insider told Thisislagos that “anyone with knowledge of how companies work must be aware that expatriate CEOs do not apply for their own resident permits. So the question is who has remit over such matters at Seplat?”
The company which operates OMLs 4, 38 and 41, 40, 53, 55 and OPL 283 as part of its suite of offshore assets and a robust mid-stream gas portfolio via Oben gas processing Plant and ANOH Gas processing plant notes on its website that “Roger Brown joined Seplat in 2013 as chief financial officer before being appointed CEO in August 2020” following the retirement of pioneer CEO, Austin Avuru, the cerebral oil man who has been a poster boy for Nigeria’s indigenous oil and gas industry.
What it does not say is that Roger Brown, who had a stellar banking career in London’s financial district as head of Oil and Gas at Standard Bank, was the one who mooted the idea for Seplat to go public in 2014 in a highly successful dual listing on the London and Nigerian stock exchanges.
Austin Avuru makes the point in an interview that it was Roger Brown who in 2012 approached him with a proposal showing that Seplat had done so well in its two years of existence and was ripe for a public offer and put the value of the company at between $700million and $1Billion.
“Roger Brown, our CEO designate, who was a staff of Standard Bank then, was the first person who came to do a presentation to me. As we settled down, he said, ‘Do you know that your company is worth between $500 million and $800 million? You are ripe for an IPO.’”
The IPO would happen and Seplat would go on to become Nigeria’s most successful and well-run oil and gas independent. Roger Brown was not the first choice for the CEO position following Avuru’s retirement on account of the fact that the company had planned for an oil man to run the company, he was put forward by founding chairman ABC Orjiako for the top job even though others had been shortlisted and groomed for the top job.
But whatever the reasons are, this current crisis does not augur well for Seplat Energy in the oil and gas industry as well as within the financial markets especially for a company that has been hit by recent unsavoury reports in the media even if in a clear case of collateral damage.
This point is critical because Seplat has consistently projected itself as above the fray and has often been described as a Nigerian success story. Stories like this thus have the potential to damage investor appetite as well as investments in the sector and Nigeria’s ease of doing business credentials.
A case in point would be the reports of indebtedness leveled against ABC Orjiako who stepped down as Chairman in November 2021 but did not vacate the position until the company’s Annual General Meeting in May 2022 in order to facilitate what was described as an “orderly transition.”
But according to a report in The Punch, the departure of Orjiako, the Orthopedic surgeon turned oil magnate followed the service of a court process on him and his companies over indebtedness to Zenith Bank Plc.
In a news article following his announcement, The Punch wrote: “Seplat Energy Plc announced on Wednesday the decision of Dr. A.B.C. Orjiako to step down as Chairman of the company and from its Board of Directors. The company said in a statement that Orjiako notified the board of his decision on Wednesday. It said in order to facilitate an orderly transition, he would remain as Chairman until the next Annual General Meeting in May 2022, when an independent chairperson would takeover. The resignation comes after Orjiako, alongside Shebah Exploration and Production Company Limited and eight other firms, was named in a suit instituted by Zenith Bank Plc. Seplat Energy Plc and others were given an administrative mandate not to deal with the assets of (or transfer funds to) Shebah Exploration & Production Company Limited, Shebah Petroleum Development Company Limited and Orjiako. Zenith Bank alleged that the two firms and Orjiako together owed it $78,426,578.64 and had been taking steps to sell off their assets, preventing recovery.”
An Industry leader who spoke to Thisislagos noted that “this is not good for Seplat especially in the light of recent rumblings in the industry. Imagine if yesterday a certain English man was having coffee and discussing plans to invest in Seplat only to wake up this morning and read that the CEO of Seplat has been bundled out of Nigeria. It is not good for Nigeria and the industry.”
Basil Omiyi’s reference to “a spurious and vindictive reaction to the enforcement of corporate governance standards” is telling, because Seplat Energy has remained one of Nigeria’s best run companies, especially in its transparent reporting, adherence to best practices and the institution of internal mechanisms to deal with the sort of allegations that have been made against their CEO.
A request to Chioma Nwachuku, Director, External Affairs and Sustainability at Seplat Energy was not responded to before going to press but in the request Thisislagos asked whether the revocation of the CEO’s visa and work permit followed Seplat’s well-known internal rules for such complaints especially the whistle blowing policies.
This is important because Omiyi’s statement makes clear that the allegations “have not been brought to the attention of Roger Brown or Seplat Energy for a reaction.”
During Seplat’s road show for its dual listing, the company was commended widely as a Nigerian Oil and Gas company, built on a foundation of world class standards of corporate governance with a very credible board, and a very competent management team led by a well-respected oil industry expert, Austin Avuru.
As CEO, Austin Avuru alongside the board and management designed and instituted critical board policies that encompassedRelated Party Transactions (RPT), Whistle Blowing, Conflict of Interest, Anti-Bribery/Corruption and Human Resources policy of Equal opportunity.
If Roger Brown flouted these rules, why were they not presented to the board which is composed of Executive Directors, Non-Executive Directors and Independent Executive Directors (INEDs) and a Senior INED who is seen as “watch dog of the board?” And if these steps were not followed, how did allegations from staff get to the Ministry of Interior?
Seplat also has a robust whistle blowing policy headed by the “Business Integrity” department and regarded as one of the best in the industry. In order to ensure that staff are not scared to report infractions, the company commissioned KPMG to help build a forensic investigation unit to set up the IT infrastructure to allow for the reporting and effective investigations of infractions that would support the Business Integrity department with forensic investigations.
In the period between January 2015 and July 2020, 26 members of staff (including Senior Management staff) were disengaged having been found culpable of grave infractions, leading Seplat to build a reputation in the industry as a company with zero tolerance for corruption and corporate malfeasance.
On account of the silence from communications directorate led by Chioma Nwachuku whose remit according to her LinkedIn profile includes Government Relations and the Board’s robust defence of Roger Brown, it is safe to assume that these processes may not have been followed, that someone may have dropped the ball, and that the allegations and consequent revocation of his visa and work permit are indeed based on nothing more than “spurious and vindictive” allegations.
