Afren criminal trial lays banking weaknesses bare
A string of due-diligence shortcomings enabled the international fraud that sapped investor confidence in once-booming London-listed oil firm Afren – and has also now led to jail time for its two top executives. What lessons can the banking industry learn from the failings laid bare in the court proceedings?
Osman Shahenshah, former CEO of Afren
Sourcing illicit funds is one thing, laundering them is quite another. That is what Osman Shahenshah and Shahid Ullah, the then chief executive and chief operating officer of the booming oil firm Afren, found out in October 2013.
By then, the two men had secured the promise of payments totalling $45 million from a Nigerian oil mogul, to be shared between them and others through an offshore company created for that purpose. But they still needed a bank account to receive and distribute the money.
For that, Shahenshah turned to Patrick Chalmers, then a private banker in the Jersey office of South Africa’s Standard Bank. But Chalmers did not play along as expected.
Instead, the banker responded by email with a series of queries about the offshore vehicle and the legitimacy of the transfers it would receive.