$1.3bn Malabu scam: Shell, Eni to face trial in Italy
Royal Dutch Shell Plc and Italian oil major, Eni, would face trial in Italy over a $1.1bn bribery scandal in Nigeria, an Italian judge ruled on Wednesday.
The trial would start on March 5, 2018 in Milan, judge Giusy Barbara told reporters, according to Bloomberg.
The long-awaited decision, initially expected several months ago, will not only affect the two companies but 11 individuals, including Eni’s Chief Executive Officer, Claudio Descalzi.
The companies are accused of corruption in the 2011 purchase of Oil Prospecting Licence 245, an offshore oil block in Nigeria estimated to hold nine billion barrels of crude for $1.3bn.
The deal saw the Nigerian government act as an intermediary between the oil majors and Malabu Oil and Gas, a Nigerian company allegedly controlled by a former Petroleum Minister, Dan Etete. In 1998, the block was awarded by Etete to Malabu Oil and Gas, which later sold it to Eni and Shell.
Prosecutors alleged that the two companies’ payment of almost $1.1bn into a Nigerian government escrow account was later distributed as payoffs.
Allegations of corruption and bribery have mounted over the years, forcing Shell and Eni to repeatedly maintain that they acquired the rights to the lucrative block in line with Nigerian law.
In Nigeria, the Economic and Financial Crimes Commission filed corruption charges against Shell and Eni in March, accusing 11 defendants, including Etete, of “official corruption” in connection with the oil block deal.
In January, the EFCC also charged a former Attorney-General of the Federation, Mohammed Adoke, and Etete with money laundering over his receipt of $2.2m in alleged proceeds of the OPL 245 deal.
The Federal Government successfully recovered $85m in proceeds of the deal from the UK. The money had previously been frozen as suspected proceeds of crime at the request of Italian authorities.
Former President Goodluck Jonathan has denied receiving kickbacks, saying in January that he had not been “accused, indicted or charged for corruptly collecting money” linked to the deal.
The OPL 245 oil block has been a source of contention for almost two decades.
Under Italian law, a company can be held responsible if it is deemed to have failed to prevent, or attempt to prevent, a crime by an employee that benefitted the company.
A campaign group, Global Witness, and others said much of the $1.3bn in payments for the block did not go to the state but instead went to Etete, who was convicted of money laundering in a 2007 French case related to his time in the Nigerian government.
Shell had previously said it was aware that some of the payments it made to Nigeria for rights to the oilfield would go to Malabu but said the transaction was fully legal.
Shell, in a statement on Wednesday, expressed disappointment over the decision by the Judge of the Preliminary Hearing of the Tribunal of Milan in Italy to remand the company for trial for alleged offences related to the OPL 245.
The oil major said, “We are disappointed by the outcome of the preliminary hearing and the decision to indict Shell and its former employees. We believe the trial judges will conclude that there is no case against Shell or its former employees.
“Shell attaches the greatest importance to business integrity. It’s one of our core values and is a central tenet of the business principles that govern the way we do business. Shell has clear rules on anti-bribery and corruption and these are included in our Code of Conduct for all workers. There is no place for bribery or corruption in our company.”
Eni, in a statement on its website, expressed “full confidence in the correctness and integrity of both the company’s and chief executive’s actions.”
Its Board of Directors reaffirmed its confidence that the company was not involved in alleged corrupt activities in relation to the transaction.
It said, “The board’s decision was also taken on the basis of the results of independent advisors’ investigations. The advisors were appointed to examine all relevant resolutions and documents deposited within the closing of the Milan prosecutors’ investigation in 2016.
“The Board of Directors also confirmed its full confidence that Chief Executive Claudio Descalzi was not involved in the alleged illegal conduct and, more broadly, in his role as head of the company. Eni expresses its full confidence in the judicial process and that the trial will ascertain and confirm the correctness and integrity of its conduct.”