Oil firm Afren plunges after CEO suspended

* CEO, COO suspended pending investigation

* Half-year results postponed until later in August

* Investec (LSE: INVP.L - news) downgrades stock from buy to hold

* Shares (Frankfurt: DI6.F - news) plunge as much as 34 pct (Adds background, updates shares)

By Huw Jones

LONDON, July 31 (Reuters) - London-listed oil explorer Afren Plc said its board had temporarily suspended its chief executive and chief operating officer, wiping about 500 million pounds ($840 million) off its value.

The Nigeria-focused company said in a statement on the London Stock Exchange (Other OTC: LDNXF - news) 's company news service that a review for the board found evidence of "the receipt of unauthorised payments potentially for the benefit of the CEO and COO".

"These payments were not made by the company. The investigation has not found any evidence that any other board members were involved," Afren (LSE: AFR.L - news) said in a statement on Thursday.

"No conclusive findings have yet been reached and the investigation is ongoing," the statement added.

Shares in FTSE 250 company Afren plunged by as much as 34 percent, hitting their lowest level since June 2012, before recovering some of their value to trade down 26 percent at 110.50 pence at 1258 GMT.

The investigation is being conducted by law firm Willkie Farr & Gallagher.

The public relations firm acting on behalf of Afren said there was no further comment from the company, Chief Executive Osman Shahenshah or Chief Operating Officer Shahid Ullah.

Investors had already been wary of Afren's corporate governance record, registering their concerns last year when shareholders owning 80 percent of the stock voted against a resolution to approve the directors' pay report.

Shahenshah, one of Afren's founders who owns a 0.6 percent stake in the company according to Thomson Reuters data, was paid a total of 6.6 million pounds in 2012 and 2 million pounds in 2013.

Afren said it would postpone half-year results which were due on Aug. 4, though it said the board has no reason to believe the investigation will hurt the company's financial or operational position.

A new date in August will be announced in due course.

Investec Securities analyst Brian Gallagher said in a note to clients on Thursday that it had downgraded the stock to "hold" from a "buy" rating, and was reviewing its price target.

Egbert Imomoh will become executive chairman and the board has appointed Toby Hayward, currently senior independent director, as interim CEO, while the investigation is conducted.

In May, Afren reported first-quarter net production of 35,465 barrels of oil per day, lower than its target of 40,000.

Afren, which is targeting double-digit production growth over the next five years, has its main assets in Nigeria but also operates in Kenya and Kurdistan.

In Nigeria, the company has used its local-arm First Hydrocarbon Nigeria to position itself as a potential buyer of oil fields being sold off by some of the world's biggest oil companies including Shell (LSE: RDSB.L - news) and Chevron.

Since 2010 Nigeria has had a policy of encouraging more direct ownership of its oil and gas by Nigerians, either through the state oil company or local private firms. (1 US dollar = 0.5930 British pound) (Reporting by Huw Jones; Additional reporting by Sarah Young; editing by Jason Neely/Ruth Pitchford)