British oil and gas producer Afren Plc sacked its chief executive, chief operating officer and two associate directors after an independent review into unauthorised payments found evidence of "gross misconduct."
Shares in the company rose as much as 6.6 percent on Tuesday morning, which an analyst said was mainly on the conclusion of the review and that the incidents would not affect Afren's operations.
The probe also found that seven more current and former employees also received payments and Afren said it had begun disciplinary action against these employees.
Afren said it would start legal proceedings against founder and CEO Osman Shahenshah, COO Shahid Ullah and associate directors Iain Wright and Galib Virani to recover money related to the payments.
The dismissed executives could not be immediately reached for comment.
Oriel Securities analyst Dragan Trajkov said the conclusion of the review and the lack of a material impact was positive.
"Although failing to comply with some of the listing rules could result in further fines from FCA, we believe the market has already punished the company for it," Trajkov said in a note.
The review, conducted by law firm Willkie Farr & Gallagher (WFG), began in July to determine if three legitimate transactions with Afren's partners Oriental Energy Resources Ltd and AMNI International Petroloeum Development Co Ltd in 2012 and 2013 should have been disclosed to the market.
The review found that Shahenshah and Ullah had agreed with Oriental to receive 15 percent of the net cash flows that was due to Oriental from the Ebok oil field for 5 years from 2013 in exchange for $400 million in funding by Afren.
Oriental paid $45 million for 2013 into a special purpose vehicle owned and controlled by the two top executives, who used the funds to pay bonuses to themselves and selected employees of Afren, the review found.
WFG also uncovered evidence that suggested that the two executives sought personal benefits from a 2013 management buy-out of AMNI.
WFG's review found no evidence that either matter was discussed with Afren's board, according to the statement.
Afren suspended Shahenshah and Ullah in July when it began the review and the two associate directors in August as the review expanded.
The independent explorer and producer, which has notified British watchdog Financial Conduct Authority (FCA), said its partners in Nigeria were not aware of any wrongdoing.
The company said Toby Hayward will remain as interim chief executive while its board searches for replacements. Egbert Imomoh will remain as executive chairman.
Afren shares, which have fallen by nearly a third since the review began, were up 2.7 percent at 100.1 pence at 1031 GMT on the London Stock Exchange. (Reporting by Abhiram Nandakumar in Bangalore
