Petrofac spent £1m on boss's private jet

James Moore
Monday 10 June 2013 01:47
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Oil services company Petrofac spent $1.5m (£1m) on its boss's private jet and a further $189,000 on "client entertainment" provided by one of its own executives' businesses last year, The Independent can reveal.

The company only disclosed the spending deep in the bowels of its 170-page annual report. They can be found on page 141.

While Petrofac's shares have struggled recently, it has been one of the FTSE 100's best performing shares over last five years. But investor groups have questioned whether the spending is appropriate.

While it is true the company does business in some far flung territories where commercial flights are not readily available, they have queried its use of an executive's jet "owned by an offshore trust of which group chief executive Ayman Asfair (pictured) is a beneficiary".

The spending on the jet compares to a $1.4m outlay the previous year, and is described as being at a cost "significantly below market rates".

The use of the jet has been criticised by Pirc, which acts as a voting advisor for some of Britain's biggest pension funds.

Prior to the group's annual meeting earlier this year it advised clients to oppose the annual report citing the disclosures about the aeroplane. It said: "Arrangements concerning the company aeroplane are not at all clear from what is written in the accounts."

The report says of the entertainment that the $189,000 was used to purchase that it was "in respect of key management interests relating to client entertainment provided by a business owned by a member of the group's key management".

A spokesperson for the company said: "The chartered aircraft is used for journeys that would be impracticable using standard commercial flights and the rates paid by Petrofac are less than comparable market rates.

"On occasion Petrofac also uses a business owned by a member of Petrofac's senior management team as part of its entertainment programme for key customers at rates which are extremely competitive.

"Details are fully disclosed in the group's annual report and regularly reviewed by the audit committee."

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