interrogates accounts of alleged boardroom events at Seplat Energy as rendered by its former MD/CEO, Austin Avuru.
It is a given in the corporate world that Directors and Chief Executive Officers (CEOs) owe confidentiality and fiduciary obligations to their companies. These are both ethical and legal demands; hence apart from respective company’s corporate governance codes, the Companies and Allied Matters Act (CAMA) 2020, Nigerian Code of Corporate Governance (NCCG) 2018, the United Kingdom’s Code of Corporate Governance, among others, represent efforts to ensure that company interest supersedes individual interest.
For instance, Section 306 provides of CAMA 2018 provides that “The personal interest of a director shall not conflict with any of his duties as a director under this Act”. Therefore, when in December 2021 the Board of Directors of Seplat Energy Plc. announced the termination of the appointment of its pioneer/immediate past Managing Director/CEO, Mr. Austin Avuru, as a Non-Executive Director, it predicated it on alleged breach of his fiduciary duties and Seplat’s corporate governance codes. As reported at the time, Avuru was the promoter and a Director of another, Chappal Petroleum Development Company Ltd. while he was still Seplat’s CEO, and failed to declare it.
Ironically, Seplat was already involved in the acquisition of the whole share capital of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil Corporation, USA; hence he allegedly used Seplat’s insider information to launch a rival bid with Chappal, incorporated in 2020. That in itself was unethical, illegal, and punishable under Nigerian laws. He also became the Chairman of Chappal while still serving as Non-Executive Director of Seplat without declaring same to Seplat Board.
When all pretences are set aside, business, like politics, is war by other means; hence a business analyst described Avuru’s actions as corporate espionage akin to a General of an enemy army sitting in the War Council of the rival army.
Surprisingly, Avuru is back in the news with his yet-to-be-presented book, “My Entrepreneurial Journey”, which excerpts were published in the May 2022 edition of “Africa Oil + Gas Report”. Therein, he reels out graphic details of purported boardroom events surrounding the appointment of his successor as CEO. With every stroke, he tries to present Seplat as racially divided and its co-founder/immediate past Non-Executive Chairman, Dr. ABC Orjiako, as an ethnic bigot. Going by his virulent polemics, he would have invoked Sango (Yoruba god of thunder) upon both if he had the powers.
The grouses
According to Avuru, Seplat Board had agreed to recruit an Operations Director (OD), who would be carefully groomed over a few years to succeed him. They kick-started the process in October 2016 with “six highflying candidates”. The interview panel included himself, Orjiako (as Chairman of Nomination Committee, NOMCO) and other members of NOMCO.
He writes: “After two days of elaborate interviews, we selected two candidates, both experienced Petroleum Engineers…. I instructed HR (Human Resources) to engage both candidates for discussion, with the Addax Director being our number one choice and the Shell GM the reserve candidate.
“As soon as I returned to my office, the Chairman summoned me to his office. He was looking agitated and angry. Once I sat down, he said, ‘Look, Austin, at the rate you are going, when we leave this company, they may not even allow us through the gate into the company premises’
“What was the problem? Our preferred candidate was of Igbo origin, a brilliant Ph.D. holder whose parents were both professors. None of us on the interview panel (except, of course the Chairman) considered his ethnic origin in picking him as our preferred candidate. The reserve candidate was Yoruba and Chairman was vehement in accusing me of filling too many management positions with Yorubas. He insisted we settle for the preferred candidate…
“Surprisingly, and without reason, we received a one-line email from the candidate a week later stating… ‘I am sorry but I not be able to take the offer’”.
Accordingly, the process was re-launched in 2017. The leading candidate hailed from Akwa Ibom, while the first runner up was a Yoruba.
“It took one year for our candidate to be able to extricate himself from Shell…. During this period, our number two candidate (the Yoruba) was employed by a company promoted by our Chairman, Salvic Petroleum….
“The new Operations Director assumed duty in February 2018. The plan was to groom him to slide into my position in two and half years”, he explains.
He, however, alleges that Orjiako appointed “one errand consultant” to “profile the CEO job, evaluate the OD and CFO (Chief Financial Officer) and submit a report” based on which NOMCO and the Board would decide his successor.
“He fixed a special Board meeting for November 11 2019 in Dubai for the purpose of choosing a new CEO…. In Dubai, the consultant presented a report that essentially said both candidates were excellent, albeit each having his strong and weak points…. He also suggested that picking any of them, from the strong sentiments already generated, would create deep divisions in the company and submitted the names of five Nigerian CEOs/Deputy CEOs of some multinationals organisations from which we could hire.
“In a well-choreographed exercise, the Chairman waived all suggestions aside and invited each of the candidates to make presentations to the Board at the end of which he called for a vote.
“Nine of the twelve Directors were invited to vote (with the Chairman holding back his vote in case there was a tie). Five expatriate Directors (that, including the Nigerian/British director) voted for the CFO (Roger Brown), three Nigerians voted for the OD while one Nigerian Director abstained. In the nine years of the Company, we had never been so racially and bitterly divided on any issue. The Chairman declared the result final and I stormed out of the meeting”, he concludes.
He equally alleges that Orjiako stayed put as the Chairman of NOMCO despite a policy by the Security and Exchange Commission and corporate governance code to the contrary.
Interrogating the grouses
The first impression about Avuru’s account is boardroom politics, which is a universal phenomenon. Companies everywhere have their internal power plays, but by their confidentiality obligation, Board members don’t wash their linens in public. So, by taking an otherwise confidential company matter to the market square, where lies the overarching company interest in Avuru’s world?
Secondly, reading in-between the lines of his account, it is not difficult to see a sense of entitlement or prerogative to produce/anoint his successor. Unfortunately, other parties thought otherwise, and thwarted it.
But there are pertinent questions to ask: Was it the official decision of the Board to keep the first runner-up in the 2016 interview as a “reserve” or was it Avuru’s singular decision, and why? Did the successful candidate just wake up to reject the offer or did person(s) take steps, including calls, to pass subtle threats, to misrepresent Seplat as a hostile work environment, and to place the candidate on a lower level than he deserved to dissuade and get him out of the way for the “reserve” candidate? Was the purported “reserve candidate” rejected because he was Yoruba or because the Chairman and other Board members probably saw through a plot to install a potential puppet CEO?
The above questions also become pertinent since, by Avuru’s account, Orjiako hired the Yoruba, who came second in Seplat’s 2017 round of interview. So, why would Orjiako want Yoruba in his own company, Salvic Petroleum Development, and not want them in Seplat? It is quite contradictory, especially when it is common knowledge that Orjiako gets along well with the Yoruba and has a long history of working well with them in the corporate world. Obviously, Avuru’s claim is a mischief to tarnish Orjiako’s image and pitch his numerous Yoruba friends/business associates against him.
Come to think of it, how come a supposedly deracialised and cosmopolitan Avuru easily sees everything from the prisms of tribe and race? How come he readily concluded that everyone, who voted for Brown as CEO, did so on racial ground? What happened to competence? Instructively, it has been almost two years since Brown succeeded Avuru in August 2020 and Seplat continues to surge from strength to strength.
Meanwhile, since Seplat enjoys dual listing (on the Nigerian Stock Exchange and London Stock Exchange), it naturally operates Nigerian and UK conventions. It wasn’t out of place for the Chairman to chair the NOMCO since UK Code of Corporate Governance permits it. Findings also show that Orjiako actually stepped down as NOMCO chairman once the Security and Exchange Commission came up with a policy to the contrary.
Furthermore, describing a global HR brand like Heidrick & Struggles (H&S) as “errand consultants” only goes further to present Avuru as a “My-way-or-the-highway” capitalist.
Interestingly and ironically, in the event brochure for the Industry Lecture and Sendoff Party recently organised by Seplat in Orjiako’s honour, Avuru confessed that Seplat was designed from Day One in such a way that the Chairman is not a passive position where the chairman “would just preside over Board meetings four times a year”. He relived how, together, they build Seplat from ground zero and how Orjiako always wanted nothing except the best for the company. He described Orjiako as a forthright person, “brilliant and cerebral”, “very resourceful, very sophisticated, and very kind”, and, in fact, “one of the strongest Catholics”.
Likewise, global business powerhouses and partners/associates of Seplat such as the Founder, Maurel & Prom, Monsieur Jean-Francois Henin; former CEO of London Stock Exchange/former Non-Independent Director, Seplat Energy, Xavier Rolet; Group CEO of Nigerian Stock Exchange, Oscar Onyema; Senior Independent Non-Executive Director of SEPCOL; former UK Minister/former UN Deputy Secretary/former Independent Non-Executive Director of Seplat, Mark Malloch-Brown, etc. cannot all be wrong in praising the great job Orjiako did as Chairman of Seplat. So, Avuru wasn’t alone in the aforementioned assessment of Orjaiko as a consummate entrepreneur.
Consequently, many are wont to wonder what manner of man praises an associate to high heavens in one breath only to seek to stab and slay his credibility in another breath. Or what manner of a corporate player runs down a company that has given him firm and fortunes.
This development only goes to further justify Seplat’s decision to sack Avuru from their Board in 2021. He has failed woefully in his confidentiality obligation and acted in ways inimical to Seplat’s interest; and it is a matter Seplat should never gloss over.
Oseji writes from Lagos
