Lekoil's Nigerian unit stands by ousted CEO

Lagos-based Lekoil Nigeria has kept Olalekan Akinyanmi as its CEO, despite his sacking as boss of London-listed parent company Lekoil Cayman (Lekoil Ltd) earlier this month over a "corporate governance breach." The subsidiary, in which Lekoil Cayman has a 40% stake, is developing the offshore Ogo oil and gas discovery off Nigeria.

Lekoil Cayman reported on June 3 that it had sacked Akinyanmi with immediate effect. While it did not say what the corporate breach constituted, it did note it had provided Akinyanmi with a loan, which had an outstanding balance of around $1.5mn as of May 31, and would start proceedings to cover this sum.

The loan was provided in December 2014. In March, Lekoil Cayman said Akinyanmi had failed to pay around $413,500 that had been due that month, and would deduct sums from the CEO's salary. It also said the loan was now in default and it would add 4% in annual arrears.

In another statement on June 10, Lekoil Cayman elaborated saying that it was aware that in late 2020 Akinyanmi entered into a contract to serve as CEO of its 40%-owned subsidiary Lekoil Nigeria, effective January 1, 2021, without its prior knowledge or consent. It said this was one reason why it had terminated its own contract with him. It said it would seek legal advice regarding the issue.

Lekoil Nigeria has painted a different picture of developments, however. The subsidiary said on June 3 that the termination of Akinyanmi's contract at the parent company "was the culmination of the efforts of the consortium led by Metallon Corp to take control of Lekoil Cayman."

Metallon, a mining company acting as a activist shareholder, said in November 2020 that Lekoil Cayman's board lacked "proper governance structures and oversight of management." At the start of 2021 Metallon brought in three new board members.

"Since the takeover of the board of Lekoil Cayman in January by Metallon ... and its collaborators, concerted efforts have been made to seize control of the assets of Lekoil Nigeria," Lekoil Nigeria said. "The decision to remove Akinyanmi is the latest outcome of this strategy."

Lekoil Nigeria said the CEO's sacking did not comply with the company's corporate governance policies, and that he would remain its CEO and a member of its board. It too is taking legal counsel.