Economy
Why Seplat Sacked Avuru as Non-Executive Director
The investing public may not have heard details of the main reasons why Austin Avuru, a former chief executive officer of Seplat Energy Plc who later became a Non-Executive Director was sacked from the board of the energy company.
Seplat Energy Plc had on Thursday, December 23 notified the Nigerian Exchange Limited (NGX) that its board has terminated the contract of appointment of Austin Avuru as a Non-Executive Director.
Seplat Energy told the NGX that Avuru’s appointment was terminated on December 22, 2021, “due to breaches of the Company’s corporate governance policies and his fiduciary duties.”
Shortly after SEPLAT hammer fell on Avuru, Perchstone & Graeys, the law firm representing the sacked Non-Executive Director said the allegations levelled against him (Avuru) by Seplat Energy Plc were aimed at “damaging his hard-earned reputation” based on “fictitious allegations” even though the same statement accepted that their client (Austin Avuru) had taken “an ill-advised action”.
The law firm had said this in a statement issued last week and signed by Osaro Eghobamien and Folabi Kuti, its lawyers.
However, the emerging facts seem to bear serious consequences.
Under the Companies and Allied Matters Act, 2020 (CAMA), directors have a duty to exercise their powers and discharge their duties honestly, in good faith and in the best interests of the company. They are also expected to exercise that degree of care, diligence and skill which a reasonably prudent director would exercise in comparable circumstances.
It was learnt that following an enquiry by the Board of Directors of SEPLAT, Avuru had allegedly on December 1, 2020, admitted his conflict of interest in connection with SEPLAT’s business and more particularly its proposed acquisition of some Nigerian assets in which ExxonMobil Corporation has interests.
Avuru also admitted that he had on that date been appointed the Chairman of Chappal Petroleum Development Company Limited (Chappal) and that Chappal had been invited by ExxonMobil Corporation for discussions and possible access to their database in respect of the assets.
Further enquiries by SEPLAT Board revealed that Avuru had already acquired an interest in Chappal over nine months earlier, as far back as March 2020, whilst he was still CEO of Seplat Energy.
More revealing was that the incorporation documents of Chappal as shown at the Corporate Affairs Commission (CAC) revealed that Avuru was and remained both a founding shareholder and director of Chappal, but he failed to disclose his interests in Chappal to the Board in December 2020.
It was further learnt that prior to December 1, 2020, Avuru was much aware, but failed to disclose that Chappal had put in a bid for the said oil and gas assets.
SEPLAT Board after completing the process of its review was satisfied that Avuru failed or refused to disclose a conflict of interest as soon as he acquired an interest in and was appointed a director of Chappal and became aware that Chappal was bidding for the assets.
Avuru knew that SEPLAT which he was a Non-Executive Director was also interested in the assets and he had participated in SEPLAT’s Board discussions relating to SEPLAT’S bid for the assets.
These findings seemed to have affirmed for Board of SEPLAT that Avuru by his actions clearly breached his fiduciary duties and obligations as a director as stipulated under the existing Nigerian Code of Corporate Governance (NCCG) as well as the Securities and Exchange Commission (SEC) Code of Corporate Governance to which Avuru’s appointment was subject.
Avuru as then Non-Executive Director had a duty to notify SEPLAT of his appointment onto the board of Chappal, bearing in mind that he was the CEO of SEPLAT at the time and both companies operate within the same industry.
SEPLAT Energy has a standard listing on the Main Market of the London Stock Exchange (LSE), therefore the company is publicly committed to comply voluntarily with and to abide by the United Kingdom’s Code of Corporate Governance (UK Code).
In accordance with the UK Code provisions, Board directors are not only expected to act in a manner consistent with their duties under company law, but also to uphold the highest standards of integrity.
Prior to appointment into the Board, directors are expected to disclose their significant commitments to the board (together with an indication of the time involved) and additional external appointments are not to be undertaken by directors without prior approval of the board.
By not notifying the SEPLAT board of his appointment to the board of Chappal in March 2020, at a time when Avuru was the CEO of SEPLAT, and not seeking prior approval from the SEPLAT board to take on this new appointment, Avuru acted in a manner that was inconsistent with the provisions of the UK Code and the guidance.
It was further learnt that Avuru also failed to disclose his appointment as a director of Chappal when he accepted the role of a Non-Executive Director (NED) of SEPLAT.
No doubt, prompt and timely disclosure of this board appointment was particularly key in allowing SEPLAT Board to assess the risk of any conflict of interest arising and to take appropriate measures to manage a potential conflict.
Considering the statutory requirement from directors, Avuru had a duty to exercise good faith and a reasonable degree of care and prudence in how Avuru handled the potential conflict.
He failed to exercise his duty of care to SEPLAT by being forthright in disclosing the conflict or likelihood of conflict of interest to SEPLAT, before or promoting/ incorporating Chappal in March 2020.
By failing to promptly disclose his directorship in Chappal, Avuru placed himself in a position where his duties as a director of SEPLAT conflicted with the concurrent opportunities he pursued as founding shareholder and director of Chappal and SEPLAT in a position where it was temporarily unable to take prompt action to manage the potential conflict of interest and to comply with the provisions of CAMA as well as the principles of the NCCG, SEC and UK codes.
For almost one year, Avuru’s attention was said to have been fully with Chappal as against SEPLAT, a situation that was most unfair to SEPLAT, its shareholders and other stakeholders.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended the negative start to the week by 0.28 per cent on Tuesday, February 24, with the market capitalisation down by N6.64 billion to close at N2.378 trillion versus Monday’s N2.384 trillion, and the NASD Unlisted Security Index (NSI) falling by 11.1 points to 3,974.80 points from 3,985.90 points.
At the session, transaction value skyrocketed by 1,706.3 per cent to N1.2 billion from the previous day’s N61.8 million, as the transaction volume increased by 59.1 per cent to 11.6 million units from 7.3 million units, and the number of deals expanded by 23.1 per cent to 48 deals from the preceding session’s 39 deals.
Central Securities Clearing System (CSCS) Plc remained the most active stock by value on a year-to-date basis with 33.7 million units exchanged for N2.0 billion, Okitipupa Plc was next with 6.2 million units traded for N1.1 billion, and Geo-Fluids Plc occupied the third position with 121.0 million units valued at N474.9 million.
Resourcery Plc emerged as the most traded stock by volume on a year-to-date basis with 1.05 billion units worth N408.7 million, followed by Geo-Fluids Plc with the sale of 121.0 million units for N474.9 million, and CSCS Plc with 33.7 million units worth N2.0 billion.
Yesterday, the market breadth was flat after the bourse finished with three price gainers and three price losers led by MRS Oil Plc, which shed N14.50 to close at N200.00 per share versus the previous day’s N214.50 per share, CSCS Plc depleted by N1.39 to N65.82 per unit from N67.21 per unit, and Geo-Fluids Plc depreciated by 1 Kobo to close at N3.30 per share versus Monday’s N3.31 per share.
The price gainers were led by FrieslandCampina Wamco Nigeria Plc, which improved its value by N1.60 to close at N95.00 per unit compared with the preceding session’s N93.40 per unit, Afriland Property Plc gained 83 Kobo to sell at N18.00 per share versus N17.17 per share, and First Trust Mortgage Bank Plc advanced by 13 Kobo to N1.45 per unit from N1.32 per unit.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited depreciated by 0.92 per cent on Tuesday after the Central Bank of Nigeria (CBN) slashed the benchmark interest rate by 0.5 per cent to 26.50 per cent at the end of its first Monetary Policy Committee (MPC) meeting for 2026.
Sell-offs mainly occurred in the consumer goods and insurance sectors, shedding 4.74 per cent and 1.31 per cent, respectively.
However, bargain-hunting remained in the others, with the industrial goods index gaining 1.92 per cent, the banking counter grew by 1.23 per cent, and the energy sector soared by 0.15 per cent.
When the bourse ended for the session, the All-Share Index (ASI) gave up 1,779.03 points to close at 194,484.52 points compared with the previous day’s 196,263.55 points, and the market capitalisation declined by N1.142 trillion to N124.827 trillion from N125.969 trillion.
DAAR Communications depreciated by 10.00 per cent to N2.25, Tantalizers also declined by 10.00 per cent to N4.86, BUA Foods shrank by 9.99 per cent to N760.60, Ellah Lakes slumped 9.96 per cent to N10.40, and Japaul lost 9.95 per cent to trade at N3.80.
Conversely, Jaiz Bank appreciated by 10.00 per cent to N12.76, Infinity Trust Mortgage Bank went up by 9.83 per cent to N19.00, FCMB gained 9.72 per cent to close at N13.55, Fortis Global Insurance chalked up 9.09 per cent to finish at 72 Kobo, and Sterling Holdco grew by 7.50 per cent to N8.60.
A total of 27 stocks ended on the gainers’ chart and 40 stocks finished on the losers’ table, indicating a negative market breadth index and weak investor sentiment.
Yesterday, investors bought and sold 1.1 billion equities worth N53.4 billion in 72,218 deals compared with the 1.3 billion equities valued at N31.5 billion in 95,091 deals recorded a day earlier.
This showed that the value of transactions went up by 69.52 per cent, the volume of trades declined by 15.39 per cent, and a slip in the number of deals by 24.05 per cent.
During the session, Japaul was the most active stock with 102.4 million units worth N399.8 million, Access Holdings exchanged 97.9 million units valued at N2.6 billion, Fortis Global Insurance traded 75.2 million units for N54.1 million, Zenith Bank sold 67.6 million units valued at N6.2 billion, and FCMB transacted 46.4 million units worth N612.2 million.
By Adedapo Adesanya
The woes of the Nigerian Naira in the Nigerian Autonomous Foreign Exchange Market (NAFEX) further continued on Tuesday, February 24.
During the session, the domestic currency weakened against the United States Dollar by N6.13 or 0.45 per cent to N1,355.37/$1 from the N1,349.24/$1 it was traded in the previous trading day.
The local currency also moved southwards on Tuesday in the same market window against the Pound Sterling after it lost N6.39 to trade at N1,828.26/£1 versus Monday’s closing price of N1,821.87/£1, and against the Euro, it depreciated by N4.94 to close at N1,596.36/€1, in contrast to the preceding session’s N1,591.42/€1.
Similarly, the Naira crashed against the US Dollar at the GTBank FX counter yesterday by N4 to settle at N1,361/$1 versus the N1,357/$1 it was exchanged a day earlier, and at the parallel market, it remained unchanged at N1,365/$1.
The fall of the Naira coincided with the Central Bank of Nigeria (CBN) buying US Dollars from the market to slow down the rapid rise of the nation’s legal tender. Latest information showed that last week, the apex bank bought about $189.80 million to reduce excess Dollar supply and control how fast the Naira was gaining value.
The rationale was to keep foreign investors from pulling their money out of Nigeria’s fixed-income market. If they sell their investments, it could increase demand for US Dollars and lead to more Dollar outflow from the economy.
Meanwhile, Mr Yemi Cardoso, the Governor of the CBN, said Nigeria’s gross external reserves have risen to $50.45 billion – the highest level in 13 years, while speaking after the 304th meeting of the monetary policy committee (MPC) of the CBN held on February 23 and 24.
The committee also reduced interest rates by 50 basis points to 26.50 per cent from 27 per cent after inflation eased in January 2026.
As for the cryptocurrency market, losses on concerns by embattled software businesses that artificial intelligence (AI) tools will destroy their business models continued and overturned some rallies on Tuesday.
Binance Coin (BNB) lost 2.1 per cent to sell for $585.41, Cardano (ADA) dropped 1.8 per cent to trade at $0.2595, Dogecoin (DOGE) went down by 1.5 per cent to $0.0920, Bitcoin (BTC) shrank by 1.2 per cent to $64,098.80, Litecoin (LTC) slipped 1.1 per cent to $51.31, Ripple (XRP) slumped 0.6 per cent to $1.35, and Ethereum (ETH) declined by 0.4 per cent to $1,857.75.
However, Solana (SOL) appreciated by 0.2 per cent to sell at $78.95. while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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