UPDATE 1-UK's SFO says ex-Afren executives convicted of fraud, money laundering

* UK’s SFO says ex-Afren execs guilty on one count of fraud

* Ex-Afren CEO, COO guilty on two counts of money laundering

* SFO says ex-execs acquitted on one count of fraud

* SFO’s investigation began in June 2015 (Adds details, quote from SFO director)

Oct 24 (Reuters) - Two former executives of collapsed oil firm Afren were convicted on Wednesday of fraud and money laundering offences relating to a $300 million business deal, the UK’s Serious Fraud Office (SFO) said.

Former Afren Chief Executive Osman Shahenshah and former Chief Operating Officer Shahid Ullah received more than $17 million and laundered $45 million, some of which was used to buy luxury properties in Mustique and the British Virgin Islands, it said here.

Shahenshah and Ullah created shell companies and agreed a side deal with one of Afren’s Nigerian oil partners from which they would benefit, without the knowledge of Afren’s board, the SFO added.

“Instead of acting in their company’s best interests, they used Afren like a personal bank account to fund an illicit deal, with no regard for the consequences,” Lisa Osofsky, Director of the SFO, said in a statement.

The men, who did not enter a plea, were found not guilty at Southwark Crown Court on a separate charge relating to a management buyout of another of Afren’s business partners.

Shahenshah’s solicitor did not immediately respond to a request for comment, while Ullah did not immediately respond to a request for comment via LinkedIn.

The criminal investigation began in June 2015 following a self-report by Afren, while the defendants were charged with four offences in September last year.

Afren sacked Shahenshah and Ullah after an independent review in 2014 found evidence of "gross misconduct".

The company’s shares lost nearly all of their value after being hit by a slump in oil prices, the dismissal of the executives and the absence of proven or probable reserves at an oilfield in the Iraqi Kurdistan Region.

Afren went into administration in July 2015 after failing to secure support for a refinancing and restructuring plan. (Reporting by Noor Zainab Hussain in Bengaluru Editing by David Goodman and Alexander Smith)