Africa-focused oil exploration and production company Lekoil has terminated the employment contract of Olalekan Akinyanmi, its CEO, with immediate effect, due to a corporate governance breach.
“The Company will commence a search for a new CEO and, in the interim period, Anthony Hawkins will act as interim Executive Chairman of the Company,” Lekoil said in a note to shareholders.
In the note, the company was not forthcoming on what constituted this breach.
Lekoil said it had provided Akinyanmi with a loan. As of May 31, the outstanding balance of the loan was around $1.5 million. Lekoil said it would start proceedings to recover the loan.
The company agreed to provide the loan in December 2014. In March, Lekoil said Akinyanmi had failed to pay $413,523 that had been due that month.
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Lekoil said it would take a portion of the CEO’s salary and apply it towards the loan. The company also declared the loan to be in default, adding another 4 percent per year to the arrears.
However, the loan dispute aside, Lekoil had been embroiled in a shareholder dispute with South African corporate shareholder Metallon, a mining outfit with 15 percent of Lekoil Ltd shares.
Lekoil Ltd has a minority 40 percent stake in Lekoil Nigeria.
Metallon Corporation, last year attempted a take-over of the assets of Lekoil Nigeria Limited, an affiliate of Lekoil Ltd.
Following a decline in the price of Lekoil Limited shares in 2020, Metallon mopped up 15 percent of the company’s shares thereby becoming the majority stakeholder in Lekoil Ltd.
Directors in Nigeria and the former CEO had resisted Metallon’s quest citing the shareholder’s agreement, which they claim prohibits Lekoil Limited from compelling Lekoil Nigeria to follow a course of action.
Metallon issued a letter in November 2020 saying Lekoil’s board lacked “proper governance structures and oversight of management”.
The situation worsened in 2021 when Metallon won a vote and brought in three new board members: Michael Ajukwu, Metallon CEO Thomas Richardson, and George Maxwell.
Michael Ajukwu who was appointed Chairman of the AIM-listed Lekoil Limited in January 2021 by Metallon Corporation, as well as George Maxwell resigned in April.
In the statement on Ajukwu’s departure, the executive expressed concerns on “a fundamental misalignment of objectives amongst the shareholders of Lekoil Nigeria”.
Metallon’s quest to assume control of Lekoil Nigeria may yet face a regulatory hurdle in Nigeria as Lekoil Nigeria and its subsidiaries remain directly responsible (to the exclusion of any third parties) for their governance.
