LEKOIL has announced the results of the investigation into the origination and execution of the loan agreement, first announced by the Company on 2 January 2020, purportedly with the Qatar Investment Authority ("QIA").

As announced on 13 January 2020, following the discovery that the Facility Agreement had not been entered into with the QIA, but instead with certain individuals falsely purporting to represent the QIA, the Board established an independent committee of the Board to investigate the origination and execution of the Facility Agreement and steps which might reasonably be taken to retrieve monies paid in association with the Transaction.

The Committee was supported in its review by Kroll Associates UK Limited acting as third-party forensic investigators. Advice was taken from Herbert Smith Freehills LLP, legal counsel engaged at the time of the Investigation, on discreet issues arising from Kroll's work.

The Committee has reported to the Board the following results of the Investigation:

• The Facility Agreement was a part of a fraud perpetrated against the Company. The Facility Agreement, and the sums to be received by LEKOIL pursuant to it, are not legally binding.
• There is no evidence of any complicity of any Lekoil Director or employee in the fraud.
• The Chief Executive Officer ("CEO") led the interaction and negotiations with the individuals falsely purporting to represent the QIA, on behalf of the Company, prior to ultimate approval being given by the Board to enter into the Facility Agreement.
• The Company has a legal claim to recover the US$450,000 paid to Seawave Invest Ltd ("Seawave") and its principals, in its capacity as introducer of those falsely purporting to represent the QIA.
• The Board only approved the execution of the Facility Agreement after a third-party global risk consultant engaged to undertake the due diligence investigation on Seawave, provided a report, based on public record search, that did not identify any "red flags" on Seawave or its principals.
• The fraud, whilst relatively elaborate and sophisticated, should have been capable of being detected by parties engaged to advise on the Facility Agreement, internally or externally, prior to its execution.
• The due diligence undertaken by the Company, including the above-mentioned third-party due diligence report, prior to the signature of the Facility Agreement proved to be inadequate.

As a result of the Investigation, and following recommendations from the Committee, the Board has taken the following actions:

• Commenced steps to recover the US$450,000 paid to Seawave, including the issuance of pre-action letter of demand against Seawave and its principals, Mr. Bismarck Abrafi and Mr. Said Memene; and Mr. Rilk Dacleu Idrac, the purported representative of the QIA.
• Commenced a review of the Company's corporate governance practices and procedures for the review and approval of major transactions, with the intent of implementing suggested changes as soon as practicable.

Whilst the Company has a legal claim to recover the US$450,000 paid to Seawave, and the Company intends to exercise the rights and remedies available to it under law, there is no guarantee that the losses suffered by the Company as a result of the fraud perpetrated against it will be recovered in full. The Company will provide further updates on the outcome of the above actions, and any material updates on the matter generally as and when appropriate.

Samuel Adegboyega, Chairman of LEKOIL, commented, 
"First of all, I would like to thank the Committee for leading the review and the provision of the detailed findings to the Board. The Board will seek, as a priority, to improve its standards of corporate governance and we welcome the recommendations received from the Committee, which are in the process of being implemented."

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