Court jails Nigerian, Italian over Malabu oil fraud

Jail

A Nigerian man and his accomplice in Italy were on Thursday sentenced to four years each for their roles in the controversial Malabu oil deal, marking the first victory for Italian prosecutors in the complex corruption case.

The deal, struck in 2011 under President Goodluck Jonathan, saw the Nigerian government stand as a negotiator in the controversial sale of OPL 245 oil block in offshore Nigerian waters.

Two international oil and gas giants, Royal Dutch Shell and Italian Agip-Eni, paid out about $1.1 billion to Dan Etete, a former Nigerian petroleum minister who had previously been convicted of money laundering in France.

The payout immediately became a subject of cross-border investigation spanning over six countries. Several Nigerian government officials were believed to have received several million dollars in bribes for the enabling roles they played.

Emeka Obi, a Nigerian consultant in England, and Gianluca Di Nardo, an Italian, stood as middlemen in connecting the parties and the transfer of the funds through international bank accounts.

They were found guilty and sentenced to four years imprisonment each on Thursday.

The pair had opted for a quick trial for their roles in the deal. The process in Italian law offers a possible reduction in any sentence.

A larger trial including Shell, Eni and 13 other defendants is ongoing. The prosecution will start presenting their evidence next Wednesday.

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“Today sees the first men fall in the murky Malabu scandal. As Shell and Eni’s trial looms, time will tell whether it’s just the middlemen who pay the price for this epic crime against the Nigerian people.

“But one thing’s for certain: this judgment will send shivers down the corporate spines of the oil industry – and will surely alarm Shell and Eni employees and shareholders who have been repeatedly told that there was nothing amiss with the OPL 245 deal,” said Barnaby Pace, anti-corruption campaigner at Global Witness.

The larger trial is remarkable for both including two of the world’s largest corporations and a number of Eni and Shell’s current and former senior managers.

Those on trial include Eni’s current CEO Claudio Descalzi, former CEO Paolo Scaroni, and Chief Operations and Technology Officer Roberto Casula alongside four former Royal Dutch Shell staff members including Malcolm Brinded CBE, former Executive Director for Shell’s Upstream International operations, and two former MI6 agents employed by Shell.

According to prosecutors, Obi kept in frequent contact with executives at Eni attempting to broker the sale of the oil license from Malabu Oil and Gas, a company owned by former Nigerian Minister of Petroleum, Dan Etete.

Prosecutors accused Obi and Di Nardo of intending to use commissions from the deal to pay bribes to Nigerian public officials and kickbacks to Eni and Shell managers.

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Since 2012 when it first denied all the allegations, Shell had insisted that it only paid the Nigerian government for the OPL 245 oil block and did not know Etete was the recipient or that he was an ex-convict.

But in 2017, Shell told the New York Times it had dealt with Etete who awarded the OPL 245 oil block to his own secretly owned company, Malabu, while serving as petroleum minister from 1995-1998.

The case against Eni and Shell brought by the Milan public prosecutor alleges that $520 million from the deal was converted into cash and intended to be paid to former President Goodluck Jonathan, members of the government and other Nigerian officials.

The prosecutor further alleges that money was also channelled to Eni and Shell executives with $50 million in cash delivered to the home of Eni’s Roberto Casula.