Italy Imposes Sanctions On Scandal-hit Petrofac Ceo Asfari

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Scandal-hit Petrofac Ltd on Thursday said Italian authorities have imposed sanctions on Chief Executive Ayman Asfari due to a past personal dealing in securities of an Italian listed company, with the CEO claiming he was “shocked” to find out about the decision.

Petrofac – already currently under investigation by the UK Serious Fraud Office relating to suspected bribery, corruption, and money laundering in relation to Monaco-based oil services company Unaoil – said the sanctions have been placed on Asfari by the Italian National Commission for Companies & the Stock Exchange.

CONSOB has alleged and determined that an executive of the unnamed Italian company passed inside information to Asfari, and that Asfari subsequently acted on that information by trading in the securities of the company in question.

“Asfari has informed the company that CONSOB’s decision was made with no prior notification of the charges against him and he was not given the opportunity to defend himself. Asfari has informed the company he strongly refutes he was privy to any inside information, believes the decision to be wholly without merit, and is determined to contest the decision, and the process by which it was conducted, to the fullest extent possible,” said Petrofac.

CONSOB has imposed a EUR300,000 administrative fine on the CEO, a 12-month disqualification from holding “administrative, management or supervisory positions in any Italian listed companies”, and the confiscation of property worth EUR385,000.

“The company understands that Asfari has, through his legal advisers, already asked CONSOB to revoke its decision at the earliest opportunity on the basis he was not given the opportunity to present any defence and refute the charges. Absent any such revocation, the company understands Asfari intends to appeal the decision in accordance with Italian law and that he is providing CONSOB with documentation that substantiates his request,” said Petrofac.

Asfari said he was “shocked” to get the notice from authorities and stressed he informed Petrofac as soon as he was made aware.

“I absolutely reject this decision which was made entirely in my absence, affording me no opportunity to defend myself. I absolutely confirm that no communication ever took place as alleged and I was never in possession of inside information. I have instructed my lawyers to immediately appeal this decision and I am confident it will be overturned,” the CEO said.

Chairman Rijnhard van Tets said Asfari is “fully supported” by the board and defended his leadership of the company “at this difficult time”.

Petrofac shares were down 1.2% on Thursday at 434.67 pence, having lost half their value since the start of the year. Shares have tumbled since May 12, when Petrofac revealed it is being investigated by the UK Serious Fraud Office.

The investigation concerns Unaoil, the company previously hired by Petrofac to provide consultancy services mostly in Kazakhstan between 2002 and 2009.

Unaoil came under the spotlight in early 2016 after Australian-firm Fairfax Media and US online news outlet the Huffington Post published reports about the company’s involvement in alleged international corruption and bribery, also implicating numerous other businesses that had worked with the business.

In relation to Petrofac, the claims suggested Unaoil turned to a middleman close to the regime of Syrian president Bashar al-Assad, stating in 2008 and 2009 that Unaoil promised the middleman EUR2.8 million for helping Petrofac win contracts from petroleum companies connected to the Assad regime.

When the original revelation about the Unaoil investigation emerged, Petrofac hired an independent investigator to look into the matter and said “no evidence was found that any director of the company was aware of the alleged misconduct that is the subject of the allegations”.

Later in May, Petrofac suspended its Chief Operating Officer Marwan Chedid due to the probe, after he and Asfari were arrested and questioned by police. Both were released without charge, but Chedid resigned.

Asfari remained in place, with Petrofac earlier this month creating a new compliance and ethics committee on its board, whilst appointing a senior external specialist to oversee the company’s current investigation by the UK Serious Fraud Office.

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