Oil CEO’s hazy past

By Jocelyn Edwards

The man who got Shs 250 billion from selling Uganda’s oil has a ‘deal with him at your own risk’ tag in financial circles

The company that may have taken Uganda for a ride in the deals for one of its most valuable resources is headed by a man with a colourful past, Anthony Leslie Rowland ‘Tony’ Buckingham.

In late November 2009, news broke that Heritage Oil had agreed to sell its Uganda fields for £909 million (Shs 2.7 trillion) to Eni of Italy.

Under the deal, Heritage pays a special dividend of 90p to 100p per share to investors. Buckingham holds 33% of the group’s 284m outstanding shares, putting him in line for a payday of up to £84m (Approx. Shs 250 billion).

Just before the deal was announced, a report released by the UK based advocacy group, Platform, suggested that Heritage Oil’s Production Sharing Agreement (PSA) with the government represented a raw deal for the country. It compared it to deals signed by the provisional government of the Iraqi province of Kurdistan, and revealed that even that stateless region will get a larger proportion of the revenues from oil than Uganda.

A little digging could have revealed to the government company founder Tony Buckingham’s association with other questionable deeds.

As he accumulated his wealth, the owner of a third of the multi-million dollar Heritage accquired a past filled with colourful characters and notorious doings. Heritage Oil’s own prospectus, released in 2008 before it listed on the London Stock Exchange, admits as much of its CEO in a section about possible investment risks. “There has been, from time to time and may periodically be in the future, media and other public speculation about the Chief Executive Officer’s associations with private military contractors and/or individuals involved with those types of companies,” it reads.

In the latest headlines, Buckingham has been mentioned as a former business partner of Simon Mann, the Briton convicted in 2008 of plotting to overthrow the government of Equatorial Guinea. Following the attempted coup, that also involved Mark Thatcher “ the son of former British Prime Minister Margaret Thatcher- Buckingham issued a statement disallowing any involvement. But his past association with Mann is undeniable. Along with South African Lt Col Eeben Barlow, he formed the paramilitary organisation Executive Outcomes in 1989. The company is considered one of the forerunners of the private military companies that proliferated in Iraq following the US invasion.

Operating mainly in Africa, Executive Outcomes (EO) made headlines in the 1990s for its involvement in various political conflicts around the continent. The company’s first job was protecting government and private oil interests from UNITA rebels in Angola. Extremely successful there, it has been credited with helping to establish a tenuous but short-lived peace between the government and UNITA. The company later went to work securing diamond fields from Revolutionary United Front rebels in Sierra Leone.

Throughout the company’s tenure, Buckingham simultaneously established business interests in the countries where EO operated militarily. His company, Diamond Works held diamond and oil properties in Sierra Leone and Angola. EO maintained that it was always paid in cash and that properties belonging to its founders were not as a result of its military activities. Furthermore, the company has always said that all its activities were aimed at helping legitimate governments maintain control.

However, others have accused it of helping private corporations profit from instability in poor nations and undermining the sovereignty of vulnerable states. The company held contracts for De Beers, the South African diamond giant accused of profiting from blood diamonds in Sierra Leone. Throughout its history, EO also provided services for Texaco, Rio Tinto Zinc and Chevron.

The company was dissolved in 1998 and Tony Buckingham turned to focus on his own company, Heritage Oil. Established in the Canadian energy capital of Calgary, Alberta in 1992, the company quickly developed a reputation for involvement in risky, high-stakes business ventures. Outside of Uganda, its most significant oil interests are in the Kurdish region in of Iraq, where it estimates that its reserves will total between two and four billion barrels.Heritage also operates in Pakistan and the Democratic Republic of the Congo.

Last year, the company moved its headquarters out of Canada to Jersey and listed on the London Stock Exchange to attract the attention of European investors. As it prepared to make the leap to a bigger market, Heritage admitted its CEO’s past involvement in paramilitary activities to investors.

That the company considered it necessary to address the rumours is an indication of how long a shadow they still cast. But it was also at pains to distance Buckingham from former business associates such as Mann, stating in its prospectus that the CEO has had no involvement in any military or security operations since the dissolution of EO. Of his former business partner it said, ‘Mr. Buckingham has had no substantive business contact with Simon Mann since 1998 and no contact of any nature with him since 2000.’ The document also stated that Heritage does not have any assets in countries where EO operated and no plans to conduct business in any of those countries.

But revelations following the latest instance of skullduggery by Buckingham’s former business partner seem to contradict the claim that the CEO has really cut all of his ties. A government investigation in Equatorial Guinea following Mann’s failed coup suggests a continued link to Buckingham. As he plotted to over throw President Teodoro Obiang Nguema Mbasogo, Mann recruited mercenaries and signed deals for equipment under the banner of Logo Ltd. And Logo Ltd happens to share a business address in St. Peter Port, in the Caribbean, with a couple of companies that can be traced back to Buckingham and Heritage: Hansard Trust Company Limited and Hansard Management Services Limited.

An April 2008 article in the London Times examined Buckingham’s Hansard connection. 2006 documents for Heritage’s Canadian subsidary, Heritage Oil Corporation give the same address in St. Peter Port in Guernsey as Hansard’s, it said. As recently as March 2008, Heritage’s prospectus revealed that Hansard owns one common share, ‘with a declaration of trust in favour of’ Heritage in four of its subsidiaries. Common shares provide the holder with voting rights and entitle them to a share of the company’s dividends. In the Times article, Heritage responded that the Hansard companies were fiduciary companies that provided secretarial services to certain Heritage subsidiaries.

The company response tried to place Hansard at even farther than arm’s length away from its CEO. But this is not the first time the issue of a possible link has surfaced.In 1996, a press release announced the formation of Diamond Works from the merger of Branch Energy and Carson Gold. The release stated the new company’s principal shareholders would be ‘the current controlling shareholders of Branch, being Hansard Management Services Limited (21.2%) and Hansard Trust Company (20.5%), both controlled by Anthony L.R. Buckingham.’ Buckingham later denied that he was the owner of the Hansard companies.

Rebuttals such as these seem an unsatisfying answer to doubts about Buckingham and Heritage, however. Questions remain about the man and his business methods.The Ugandan government would have done well to exercise caution and scepticism in allowing the CEO and his company charge over one of the country’s most valuable resources. Following revelations about Heritage’s PSAs in the country, there have been suggestions that the government should try to renegotiate. Only when the furore dies down will Ugandans find out whether or not it is too late to recover the family jewels and lock them away from the Buckinghams of this world.