Dragon Oil admitted yesterday that some former staff in its marketing and contracts departments colluded to line their pockets from contractor deals.
The development and production company launched an investigation in February after its internal audit department identified "irregularities" committed by former senior managers. KPMG, which is conducting the inquiry, has confirmed that some staff, who no longer work for Dragon Oil, were taking money in return for deals.
"Although internal controls were in place, the individuals involved managed to override the various controls in the procurement process through collusion," Dragon Oil said yesterday.
"These individuals appear to have obtained financial benefits for themselves by securing improper payments from certain contractors," the company added in a statement to the Stock Exchange.
The company – which is listed in London and Dublin, majority-owned by the Dubai government, and has substantial interests offshore Turkmenistan and in Yemen – has contacted the contractors that may have been involved in the transactions. It is also in ongoing contact with the relevant authorities in the UK and Ireland, and also in Dubai, where the group is based. It will be up to the authorities where the group is listed to decide whether a legal case is pursued.
Dragon Oil, which reports its preliminary results for the last financial year on Friday, is keen to stress that the investigation will have no impact on its financial position. It is also aiming to keep any disruption to its day-to-day operations to an absolute minimum while the KPMG inquiry continues.
Abdul Jaleel al-Khalifa, the chief executive of Dragon Oil, said: "I am personally pleased that these irregularities were identified internally and that we commissioned the investigation promptly. We have already replaced the managers involved and appropriate steps have been taken following the identification of these irregularities."
Dragon Oil was unable to confirm either the number of staff involved in the alleged malpractice or the extent of the allegations yesterday, on the basis that the matter is the subject of an ongoing investigation.
Shares in the company closed down 9p at 178.5p in London yesterday. Some 51 per cent of the group's shares are owned by the Emirates National Oil Company. Hussain Sultan, a former chief executive, is also a major shareholder.
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies