Oil explorer Afren watched its shares nosedive 26 per cent after suspending its chief executive and operations director over allegations they received ‘unauthorised payments’.

Afren, which has oilfields across Africa and in the Kurdistan region of northern Iraq, said boss Osman Shahenshah and chief operating officer Shahid Ullah had been ‘temporarily suspended’.

The announcement followed a review by law firm Willkie Farr & Gallagher into whether Afren had properly disclosed transactions it has made in the past.

During the course of the review, Afren said ‘evidence has been identified of the receipt of unauthorised payments potentially for the benefit of the CEO and COO.

‘No conclusive findings have yet been reached and the investigation is ongoing.’

It said Afren had not made the alleged payments and insisted that while its half-year results will be delayed, there was no reason to think that its financial performance will be affected. Industry sources said this indicated that Afren does not believe it will lose any of its licences to drill for oil.

The firm said it had notified the regulatory authorities, thought to include the Financial Conduct Authority and the Serious Fraud Office. The SFO has the power to prosecute firms if it finds evidence of bribery involving a London-listed company, even if the offences take place in a foreign country.

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Afren said chairman Egbert Imomoh had agreed to take on an executive role during the investigation, while senior independent director Toby Hayward will be interim chief executive.

In its annual report for 2013, the oil explorer describes its risk of bribery and corruption as being ‘low’ but that it would be updating its anti-corruption policy in 2014, including training for staff.

But it also concedes that as an oil company, ‘bribery and corruption represent an ongoing risk to our business’.