Oil exploration company in Okavango wilderness misled investors, complaint to SEC says | Land Portal

A whistleblower complaint to the U.S. Securities and Exchange Commission cites “egregious” violations by ReconAfrica and executives.

ReconAfrica, a Canadian company exploring for oil and gas upstream of one of Africa’s most lush and wildlife-rich habitats, may have fraudulently misled investors by misrepresenting its work on the project, according to several experts and allegations in a whistleblower complaint filed with the U.S. Securities and Exchange Commission (SEC).

The whistleblower, who acknowledged having submitted the report confidentially to avoid retribution and harassment, allowed National Geographic to review the 44-page confidential complaint filed on May 5. It alleges that, to drive up its stock price, ReconAfrica has violated securities laws by failing to disclose crucial information about its plans to look for oil and gas deposits across 13,200 square miles of sensitive wilderness in Namibia and Botswana, a region that includes part of the watershed of the world-famous Okavango Delta and six community-run wildlife reserves.

The company’s value increased from $191 million at the start of the year to more than a billion dollars in mid-May. The complaint, which relies on public records, cites what it says are more than 150 instances of misleading statements by ReconAfrica, alleges that the company raised millions of dollars by fraudulent means, and claims that several top executives sold their shares while ReconAfrica promoted the stock. 

On May 19, the day after National Geographic sent questions to ReconAfrica, the company submitted 22 additional filings, including new disclosures and amended reports, with Canadian regulators.

ReconAfrica has licenses to look for oil and gas in the region, but since October it has faced increasing criticism for failing to implement standard environmental protections, operating without approved water permits, and ignoring local people’s concerns about the potential impacts the project could have on their homes and water supplies—and on the region’s wildlife as well, National Geographic has reported.

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