Michael Ajukwu, a Nigerian banker who is well-connected in South Africa, was appointed head of Lekoil in January. He is stepping down after just three months in the job. Here’s why:
The match between South African mining company Metallon Corp and Nigeria’s Lekoil, in which Metallon has been a 15.1% shareholder since June 2020, is ongoing. Lekoil looks set to win.
The Nigerian Michael Onochie Ajukwu was appointed chairman of the oil junior in early January, and resigned on 21 April. Ajukwu has many ties with South African business circles and is well acquainted with the founder of Metallon, the South African Mzi Khumalo. Khumalo had given him the task of sorting Lekoil out.
But Khumalo’s plans fell through. Metallon owns 15.1% of Cayman Islands-registered Lekoil Limited. But Lekoil Limited has only a 40% equity interest in Lekoil Nigeria – the remaining 60% is held by Nigerian shareholders – and therefore has only limited power over its subsidiary. This was a “detail” that Metallon did not take into account before launching its crusade to bring Lekoil back into its fold. Lekoil is active in Nigeria on OPL 310 (17%), OPL 276 (45%), the marginal Otakikpo field, and OPL 325 (62% indirect interest).
Ajukwu taken for a ride?
Lekoil’s management, led by Lekan Akinyanmi, had warned Metallon of the existence of a particularly strict legal framework aimed at preventing Nigerian companies from being taken over by foreign entities. Khumalo reportedly chose not to inform Metallon’s shareholders, nor Ajukwu, thinking that he could take advantage of the confusion within Lekoil’s ranks to change the firm’s governance.
Metallon had taken a stake in Lekoil Limited in June, when the company’s shares were at rock bottom after it was duped by an intermediary masquerading as a Qatar Investment Authority (QIA) representative in order to contract a $184m loan
Ajukwu decided to resign in the wake of that incident, a few days after the departure of director George Maxwell, who was recently appointed as CEO of Vaalco. Thomas Richardson, CEO of Metallon since April 2020, is the only one of the three Metallon-appointed directors not to have left the Lekoil board.
