How Lekoil Chief, Lekan Akinyanmi Was Booted Out Of Own Company

The Nigerian oil junior Lekoil is caught in the crossfire as the company founder clashes with its South African shareholder Metallon.

South African mining group Metallon Corp will not let up on the Nigerian junior oil and gas firm Lekoil after a first attempt to assert its influence over the firm. On 3 June, the Cayman Islands-registered Lekoil Limited, which holds a 40% equity interest in Lekoil Nigeria, published a press release via its London nominated advisor and joint broker SP Angel in which it announced the decision to remove Lekan Akinyanmi as CEO.

The release mentions a “breach of governance” without going into further detail. Australian lawyer Tony Hawkins, previously non-executive chairman, is to serve as acting CEO. No Lekoil Nigeria executive contributed to the document, showing just how fractious the situation has become.

The Nigerian junior promptly issued its press release to state Akinyanmi “remains Lekoil Nigeria CEO”.

US corporate lawyer to the rescue

Akinyanmi has fought Metallon’s attempts to take control of the company he founded. He has no intention of sitting by in this latest move by a minority shareholder to have him ousted from the company management.

It is understood he has called on US corporate lawyer Michael E. Ellis, a partner at Proskauer, to defend his interests.

Since buying a 15.1% share in Lekoil in June 2020, Metallon, run by South African Mzi Khumalo, has been trying to work its way into the junior’s management. It succeeded in having Metallon CEO Thomas Richardson appointed to the board. Lekoil’s Nigerian portfolio includes a 17% working interest in OPL 310, 45% in OPL 276, the marginal field Otakikpo, and an indirect 62% participation in OPL 325.

The boardroom squabbles

This turn of events at Lekoil does not come as a surprise to followers of events at the oil and gas firm which has been bedevilled with internal wrangling and power tussle.

In the culmination of a bitter dispute between the Lekoil Founder/CEO, Lekan Akinyanmi and top shareholder, Metallon, the shareholders of the London-listed Nigerian oil company voted in January 2021, to approve the latter’s bid to add 3 members to the company’s board, expanding it to 7.

The dispute between Lekan Akinyanmi and Metallon caught the attention of Nigeria’s Ministry of Petroleum Resources and created more unwanted publicity for the company which was in the news for a fraudulent loan last year.

Akinyanmi had fought the change to the board, citing that if Metallon succeeded, they could be in a stronger position to make a takeover attempt.

Lekoil had also faced scrutiny from the Federal Ministry of Petroleum Resources for not notifying it over Metallon’s build-up of shares in the company.

The Minister of Petroleum Resources, Timipre Sylva, in a letter sent to Lekoil on December 30, warned that he should have been informed and that there could be consequences for not notifying him about such significant change of shareholding.

Metallon was attracted to invest in the oil and gas firm due to its low share price and a $1.9 million loan to Akinyanmi, amongst other reasons.

What you should know

Lekoil was founded in 2010 by Olalekan (“Lekan”) Akinyanmi, a Nigerian and former analyst at Alliance Bernstein, a group of professionals from the finance and oil industry. The company is a Cayman incorporated company, headquartered in Lagos and focused on African oil exploration and production with interests in Nigeria and offshore Namibia.

Metallon, a private investment company that owns four gold mines in Zimbabwe, became a shareholder of Lekoil last March and now has a 15.1% stake, making it the top investor.