ON Monday, Nigeria’s oil firm Lekoil announced that its advisers failed to carry out due diligence in the scam loan deal that threw the company listed on the London stock exchange into a financial mess.

In January, the management of Lekoil penned a $184.0 million loan deal with Qatar Investment Authority, QIA, to finance its oil exploration operations on Oil Prospecting Licence, OPL, 310 oilfields.

It was later revealed in February that the party granting the loan was not a representative of QIA , and  Lekoil confirmed it had been defrauded by phoney investors after paying $450,000 to Bahamas-based consultancy firm Seavave Investment Ltd, which acted as a broker for the deal.

Announcing the results of an investigation into the failed loan deal, Lekoil said the checks and due diligence carried out by the company, including a third party report, had proved to be “inadequate”.

“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,” according to a statement released by Lekoil.

An internal investigation was led by Mark Simmonds, former Member of Parliament, MP, in the British parliament and Tony Hawkins, a senior lawyer, who are members of Lekoil’s board to curtail the falling stocks of the company in the London stock exchange as a result of the scandal.

After the conclusion of the investigation, it was found that there was “no evidence of any complicity of any Lekoil director of employee”, and it had started legal action to reclaim the monies paid to Seawave, though, the communication with the fake investors was facilitated by Chief Executive Officer, Olalekan Akinyanmi.

Lekoil claimed that Seawave had introduced the company to individuals who “constructed a complex facade in order to masquerade as representatives” of the Qatar Investment Authority which has made the firm launch a review of its corporate governance practices and procedures for the review and approval of major transactions.

“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,” Samuel Adegboyega, a non – executive member of the board has said.