Post by Petroceltic Fraud on Feb 24, 2016 16:07:04 GMT
Petroceltic: Company directors, advisers and banking syndicate members facing lawsuit for conspiracy to defraud shareholders
A group of angry Petroceltic shareholders is reportedly preparing to file a lawsuit against company directors, company advisers Bank of America Merrill Lynch, Davy and PwC, and EY, which is an adviser to both Petroceltic’s board and to Petroceltic’s banking syndicate. The lawsuit is also targeting certain individuals within the banking syndicate, which consists of HSBC, the International Finance Corporation (IFC), Nedbank and Standard Chartered.
Sources in the legal firm involved in the matter have shared information showing that EY and the lending syndicate members have secretly agreed with company directors to hand over Petroceltic’s valuable cash-producing assets to “criminal elements” for very little money, thus leaving the company’s shareholders with nothing.
It has now emerged that the plan, disguised under the company’s strategic review process, was to dispose of Petroceltic’s Egyptian assets, effectively ”gifting” them to a group led by Atlantic Energy co-CEO Scott Aitken, known within oil industry circles to be a fraudster.
According to public sources, Mr. Aitken and his partner Jide Omokore were involved in one of the most blatant cases of corruption to ever take place in Nigeria, in which the Nigerian National Petroleum Corporation (NNPC) transferred its 55% stake in five oil blocs to companies controlled by Mr. Aitken and Mr. Omokore for $55 million in 2011. The extent of the theft became apparent when Shell, the owner of the remaining 45% of these blocs, earned about $1.3 billion when it disposed of its interest in only one of these five fields.
In an apparent effort to launder the funds stolen from Nigeria, Mr. Aitken is understood to have reached an agreement with Petroceltic’s lenders to buy the company’s Egyptian assets for an undisclosed, though rumored to be very small, sum. Once completed, Petroceltic would lose its main cash-yielding asset and the lending syndicate, assisted by Petroceltic’s company directors and advised by EY, PwC, Bank of America Merrill Lynch and Davy, would put the company into insolvency. Mr. Aitken has reportedly been acting via a front, given the difficulty he would have in passing through the Know your customer (KYC) banking regulations and anti-money laundering procedures of HSBC, IFC, Nedbank and Standard Chartered. T5 Oil & Gas, which was reported in January 2016 to be the main contender to buy Petroceltic’s Egyptian assets, has a strong connection to Mr. Aitken. Peter Heintzelman, a member of T5 Oil & Gas senior management, served as the chief financial officer of Atlantic Energy for many years, effectively acting as Mr. Aitken's right-hand man.
Legal sources have also stated that some of the shareholders have tipped off the US Department of Justice as to possible money laundering activities involving Petroceltic’s lenders HSBC, IFC, Nedbank, Standard Chartered and Bank of America Merrill Lynch, with respect to the contemplated transaction involving Atlantic Energy and Mr. Aitken. A source at the law firm involved indicated that the complaint filed late last week with the Department of Justice in the US contains individual names of bankers and company directors, although the source declined to name them.
At the same time, several strategic investors have turned down Bank of America Merrill Lynch's proposal to acquire Petroceltic’s assets out of fear of reputational damage and possible legal liabilities. This is predominantly because Petroceltic’s company directors have intentionally and consistently managed to conceal material information from investors related to an ongoing investigation by prosecutors into fraudulent practices at Petroceltic’s Bulgarian and Egyptian subsidiaries. Contact with the press department at the Prosecutor’s Office of the Republic of Bulgaria yielded the file number for the ongoing criminal investigation: No 3019/15. A source at the Varna Economic Police Unit pointed out that in the course of the criminal investigation process a number of Petroceltic directors were called in during September and October 2015 to give evidence regarding fraudulent activities. It is not clear yet why Davy and the Petroceltic directors conspired to conceal this investigation from investors and regulators in the United Kingdom and Ireland.
The shareholder lawsuit against EY and the lenders is expected to be filed in the United Kingdom towards the end of February.