Dissecting Seplat’s Corporate Governance Flaws Under Omiyi

Bayo Akinleye

The first law of holes states: “When you are in a hole, you stop digging.” But for those at the helms of affairs at Seplat Energy Plc. appear hell-bent on observing the rule in breach. For several weeks now, the company has been in the news for the bad reasons, with what appears a clear absence of leadership or strategic crisis management at all levels in the company. From ambiguous corporate announcements to seemingly sponsored media articles in their favour, it has reached the extent that the company’s employees boldly take to the social media to call out the foremost independent indigenous oil and gas company listed on both the London and Nigerian Stock Exchanges.

First was the news of the revocation of the visa, residence permit and work permit of Seplat’s CEO, Mr. Roger Brown, by the federal government following his indictment by the Ministry of Interior for not having the appropriate permits (CERPAC) and for racist practices, discrimination against Nigerian workers at the company, favouring of foreign employees, and breach of the Nigerian Code of Corporate Governance. Other allegations by Nigerian employees of Seplat that triggered the federal government’s sanction include intimidation, bullying, and sacking of Nigerian staff of Seplat; relegation of host communities, relocation of Seplat technology office to Aberdeen; intimidation of senior members of staff and management; and bullying of Nigerian employees by their expatriate counterparts; and constant abuse and derision of the President of Nigeria, among other allegations. To worsen matters, Roger Brown, according to the federal government, “declined to attend despite two invitations, claiming to be unavailable even though we learnt he was in Abuja for other purposes at the time”.

On the heels of the above, a Federal High Court in Lagos restrained Roger Brown from parading himself as the CEO of Seplat. The court equally barred the Board Chairman, Mr. Basil Omiyi, and the Independent Non-Executive Directors of the Board from continuing to run the affairs of Seplat in an illegal, unfair, prejudicial, and oppressive manner pending the hearing and determination of the lawsuit filed by some shareholders of the company over all these developments.

Host Communities Revolt

A few days ago, Seplat’s host communities took to the streets of Sapele, while others stormed the head office of the company in Lagos demanding the removal of the Chairman, Board of Directors of Seplat, Mr. Basil Omiyi and members of the board over their refusal to sack the CEO, Mr. Roger Brown. They also protested against the alleged mistreatment of the youths of the host communities and told Seplat to “employ youths as full staff, not slave contract staff, stop bullying staff, bring back the Technical Department of Seplat from Aberdeen to Nigeria”, among other demands.

Before Nigerians could digest these developments, the Omiyi-led Board that seemed to be solving their problems majorly in the press, sued the co-founder and pioneer Chairman, Dr. ABC Orjiako, and his firm, Amaze Ltd. to Federal High Court, Abuja, for initiating a letter to the federal government over a business transaction worth over $300 million towards closing the lingering $1.3 billion Mobil deal without consent of the Board. That is not all, the company is equally asking for N5 billion in damages from the respondents and, among others, a declaration that the December 22, 2022 letter “constitute a grave act of deceit and false representation especially as it is intended to bind the plaintiff in a transaction worth over $300 million, which act is unlawful as it negates the provisions of Section 90 (1) of the CAMA, 2020 and the Articles and Regulations of the plaintiff”. Questionably, the law Suit comes four months after the said offence occurred.

In all this, what is palpable is absence of leadership. For instance, the lawsuit filed against the co-founder and Pioneer Chairman of the company is a good example of poor leadership. Orjiako’s response makes the following points clear: He has the mandate under the written authorisation of the Board of Directors of Seplat to see the Mobil transaction he started to the end; the letter was written following appropriate discussions and was strictly for and in the best interest of Seplat; he clearly identified himself as the Pioneer Chairman (not incumbent Chairman) in his letter to the President. The Bloomberg report on the matter further vindicates the Co-founder of the company and collaborates some of the facts including that his appointment was to negotiate the long lingering transaction.

But even more striking is that while Omiyi was quick to drag to court a man, who co-founded Seplat and laboured for 13 years to build it into the success story that it is today to court, the company did not deem it fit to do a counter letter to the Presidency to disown the 10 per cent of the deal/assets conceded to the NNPCL. Instead, the company is ironically making efforts to consummate the deal before the end of President Muhammadu Buhari’s tenure, relying on the same letter for which they took Orjiako to court! Who does that? What then is the essence of the lawsuit?

Lack of Corporate governance

Meanwhile, emerging facts reveal that Omiyi did not follow Seplat’s good governance code that clearly states that the Board must meet and unanimously agree before any Board entity is sued. Board members read his unilateral decision on the pages of the newspaper. In Omiyi’s haste to smear Orjiako, he sensationalised the news in the press before even informing the stock exchanges and his directors. Interestingly, the company was not obliged or bound by any regulation to report the lawsuit and Omiyi’s unilateral termination of Orjiako’s contract over the Mobil deal to the Exchanges. Seplat or rather Omiyi left no one in doubt of the malice intended by the lawsuit and publications on Orjiako.

Again, one wonders what manner of Board would allow the grave matters raised by the Nigerian employees in Seplat unattended to until they invited the Ministry of Interior to intervene. Or what manner of Board would allow an employee, the British CEO of Seplat, to ignore the Ministry’s invitation, only to turn around to lie on his behalf that he was never communicated; a lie that media reports had since settled.

It is equally instructive that the only thing the Omiyi-led Board could immediately think of after the sanction was communicated to Seplat was to swiftly pass a vote of confidence in Mr. Brown whose continued stay in the country the federal government has designated a threat to national interest. Even now, Seplat workers allege that no serious attention has been given to the grievous human issues raised in their petition. Rather, Mr. Brown is still allowed to run the affairs of the company from their London office, attending meetings on Seplat’s behalf and making decisions that affect the Nigerian company. What an effrontery and disrespect to Nigeria.

As many posit, is Mr Brown by any stretch of imagination expected to still lead over this same employees, who are glad to have been liberated of his racist acts? What sort of work environment now prevails in this company? It can also be authoritatively stated that neither Basil Omiyi nor the Board, and note even the Management has deemed it necessary to address the staff matters. Rather, they gloss over them and take to press to defend the indefensible, provoking staff to run riot in the social media space with their concerns.

Social media has been bustling with this subject matter since it broke. Provoked staff of the company, with many other concerned Nigerians, have taken to the social media to rip the company apart. They accuse the company’s leaders of pouring petrol on the raging fire by trying to bully and coerce the staff into supporting the fight for confidence in the CEO, whom they are elated to see long gone.

Alleged Staff Enslavement

A Sapele-based staff wrote: “The truth they say is biter, but one cannot run away from the truth. Large enslavement is happening in Seplat Energy. Can you imagine a professional firefighter in the company still under contract for over 11 years now? What do you call that? No standard or willful act? Whoever breaks the law of the land should face his own music. Essential workers like firefighters, operation support, medics are still on contract”.

This leaves one wondering whether the leaders, if any, in the company are seeking real or organic solutions to the issues and loud disquiet in the company. This is because when all the unforced or avoidable crisis bedevilling Seplat are carefully considered, one will have no choice than to begin to believe those who say that Seplat’s crisis, from the Roger Brown issue to the lawsuit against Orjiako, might have been contrived by Omiyi to elongate his tenure.

Omiyi was only appointed in office as an interim Chairman, following Orjiako’s exit last year. Section 12.10 of the Code clearly provides that “the tenure for Independent Non-Executive Directors should not exceed three terms of three years each”. But Omiyi, who claims to be corporate governance-driven in his actions, has refused to go after ten years, even after major shareholders of the company have notified him in writing to do so. He has spent the one year plotting at all costs with Roger Brown on how to extend his stay and that of the South African based director Charles Okeahelam, who also has served for ten years too. Little wonder, why they are hell bent on saving Brown.

Interestingly, many Nigerians who have watched this drama keenly believe that Omiyi is desperately clinging on in order to either be in total charge of the Mobil transaction or see through the sale of Seplat to some South African interests or both. But whatever it is, what is not in doubt is that Seplat under Omiyi and Brown, have become a house of commotion where personal interests are taking pre-eminence over corporate interest, national interest, and the Nigerian Code of Corporate Governance. Seplat needs to be saved from their crippling grips.

Akinleye writes from Warri