Panic As Crisis Rocks The Board Of An Oil Company
OpenLife Nigeria reports that as board crisis rocking oil company, Star Orient Nigeria Limited rages unabated ,a director of the company, Isaac Trenchard Adewole,in charge of the daily operations and management of the company, suing for and on behalf of the company as a derivative action sanction by the order of the court, has renewed his legal action against four defendants namely,Olanrewaju Bangbose, Colonel Richard westley,Star-Orient Nigeria Limited and Corporate Affairs commission.
In a 59 paragraphs affidavit sworn to by Mr Isaac Trenchard Adewole in support of his case,filed before a Federal high court in Lagos south West Nigeria,by a Lagos lawyer,Barrister Folabi Kuti SAN,the deponent avers thus,that Star-Orient company was incorporated in 2015 to carry on the business of buying and selling Petroleum products and its derivates gas and other activities incidental to oil and gas transactions.
The shareholders of the company at incorporation up until the date of this suit have not changed and they are Olanrewaju Bamgbose and Dare Osamo; each of them holding equal shares of 50, O00,OOO ordinary shares of the company.
From incorporation in 2015, the company was under the administration of the two shareholders/directors until January 2020 when Dare Osamo voluntarily resigned as both director and Managing Director of the company. At that time,Dare Osamo was being investigated for mismanaging the Star Orient/Shibahwells joint venture funds.
By Joint Venture Agreement (JVA) dated 31st July 2018, the Star Orient company entered into a joint venture arrangement with Shibahwells Energy Services Ltd (Shibahwells), a private limited liability company incorporated under the laws of Nigeria and carrying on the business of trading in oil and gas products including Aviation Turbine Kerosene (‘ATK’)
The purpose of the JVA was for the Star Orient company to leverage on the financial access of Shibahwells to inject liquidity and products into Star Orient’s business and thereby create a lucrative business for both partners of the JAVA.
At the time of entering the JAVA the company had represented to Shibahwells that it had its corporate structure in place and a large pool of clientele but was lacking finance to invest into its operations so as to meet the demands of its customers and the aviation market at large.
Thus, the understanding of both parties at the time under reference was that Shibahwells would provide the financing required to improve the technical and financial capacity of the company, being the entity adopted by the parties as the vehicle for the joint venture business.
Parties agreed that some customers of the company would be assigned to the joint venture business such that proceeds from fueling such customers would go to a joint venture bank account domiciled with Wema Bank (one of the third-party lenders of Shibahwells).
It was further agreed that at the end of the month or as parties may decide,profit would be shared by both companies. And that in the event of losses, profit would not be shared until the losses are recovered.
To make the Star Orient/Shibahwells joint venture fully functional and profitable,Shibahwells purchased for the joint venture, ATK worth N1.5billion from Wema Bank.
However, after the execution of the JAVA and upon the commencement of the joint venture business, Shibahwells discovered that all representations made by the Star Orient company (through its management) before parties signed the JVA were indeed false. For instance:
(a) The company did not pay for the land it leased from the Federal Airports Authority of Nigeria (FAAN).
(b) The company’s operating licence was not up to date; it had expired.
(d) The company was heavily indebted to many of its customers who had made payments for products but were never supplied. Funds from such customers were diverted.
(e) The company was indebted to its workforce in payment of salaries and remittance of taxes and pension funds. Pension and other taxes were deducted from employees’ salaries but not remitted.
(f) The company had obtained loans from banks and some unsuspecting individuals and diverted same.
Many of the equipment (including generating set, fuelers, filtration system,or non-functional. Some of those equipment in existence indeed belonged to third parties.
However, it turned out that it had just 200,000 storage capacity.
Sometime in 2019, Shibahwells observed that Dare Osamo, the then Managing Director of the company was diverting funds meant for the joint venture business to other personal accounts, which consequently affected Shibawell’s ability to finance the facility with the third party lenders.
Upon further investigation the result of the activities of Dare Osomo in the management of the funds of the joint venture business was shown to have impacted negatively on the business such that Petroleum products and funds injected into the business by Shibawells could not be easily accounted for as a result of mismanagement by Dare Osamo.
Some bank accounts were opened and maintained in a clandestine manner in the name of the company into which part of the joint venture proceeds were diveted. When such bank accounts were discovered and Shibahwells insisted on being a co-signatory, to the account mandate cards signed by representatives of both the company and Shibahwells were either not uploaded or the mandate changed midway.
After a careful consideration of the nature of the alleged fraud and criminal collusion that characterized the management of the Star Orient/Shibahwells joint venture under Dare Osamo, Shibahwells reported the matter at the Zone two Headquarters of Nigeria Police Force, Onikan, Lagos for thorough forensic investigation and possible prosecution.
The result of the Police investigation is now subject of criminal prosecution in Charge No. ID/15422C/2021-The State of Lagos vs.Dare Osamo & 2 Others pending before Honourable Justice O. Ogala of the Criminal Division of the High Court of Lagos State, Ikeja.
The Police investigations also established a case of abuse of fiduciary/statutory duties against Dare Osamo during his period as Managing Director of the company this is now subject of civil court actions at the Federal High Court,Lagos to wit:
(i) Suit No. FHC/L/CS/874/2020-Star Orient Nigeria Limited v. Dare Osamo & TWP others.
(ii) Suit No.FHC/L/CS/1054/2021-Star Orient Nigeria Limited v. Dare Osamo and Fina Trust MFB Ltd.
Instructively during the police investigation, Dare Osamo stated that the 50% shares and indeed,the stake he own in the company did not belong to him but a third party called Tunde Babalola. Dare Osamo also stated that he and Olanrewaju Bangbose both made false representations to shibahwells regarding ownership of the Star Orient company and that they did not pay for thier shares in the company neither did they pay for the incoporation of the company.
Dare Osamo also claims to have a nominee Agreement between him and Tubde Babalola and the agreement absolves him of any liability either civil or criminal.
Since then the management of the company has been under intensive crisis,litigation upon litigations,myriad of petition to the Police,non -holding of proper board meeting and other personality squabbles.
With the above developments, Shibahwells has not been able to meet its long overdue obligations to creditors who are making repeated demands for a refund of their funds from the joint venture accounts.
Unless restrained by this Honourable Court, Olanrewaju Bangbose and Colonel Richard Westley will venture bank accounts and expose the company to both civil and criminal liabilities.
Consequently, Mr. Adewole is seeking the following declaration from the court :
A declaration that himself Isaac Trenchard Adewale is for all intents and purposes,a director of Star Orient Nigeria Limited; A declaration that Olanrewaju Bangbose and Colonel Richard Westley are in breach of fiduciary duties owed to Star Orient Nigeria Limited.
An order of perpetual injunction restraining the defendants whether,by themselves, their officers, servants, agents, privies and/or representatives from changing the bank account mandate or signatories or from taking such other steps to remove the plaintiff,Isaac Trenchard Adewole as a signatory to the bank accounts of Star Orient Nigeria Limited until all third-party creditors’funds, employees’ entitlements and all other outstanding debts and or liabilities of the joint venture: and Star Orient Nigeria Limited are settled.
An order of perpectual injunction restraining the Corporate Affiars Comminsion from effecting or causing to give effect to any purported filing made/sought to be made by the Olanrewaju Bamgbose and Colonel Richard Westley with respect to the directorship of the company Isaac Trenchard Adewole in Star Orient Nigeria Limited until all third-party creditors’ funds, employees’ entitlements and all other outstanding debts and or liabilities of the joint venture fully settled.
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