JP Morgan Chase has acknowledged it knew a former Nigerian oil minister, Dan Etete, convicted of money laundering was a beneficiary when it transferred over $800 million of government funds to a company he controlled.
This statement was contained in a court document seen by Reuters.
JP Morgan made the acknowledgement in its legal response to a lawsuit filed by Nigeria over transactions made by the U.S. bank when Royal Dutch Shell and Eni bought offshore oilfield OPL 245 from Malabu Oil and Gas in 2011.
The $1.3 billion deal has spawned legal cases spanning several countries and involving Nigerian government officials and senior ENI and Shell executives, a number of whom face trial in Italy on corruption charges next month.
Malabu is controlled by Dan Etete, who was Nigeria’s oil minister at the time of the deal and was convicted of money laundering in France in 2007. He could not be reached for comment.
The lawsuit against JP Morgan accuses the bank of negligence over the transfer of funds from a Nigerian government escrow account into which Shell and Eni had deposited money to secure OPL 245. It claims $875 million from the bank.
In its written defence, filed in a British court last week, JP Morgan said Britain’s Serious Organised Crime Agency (SOCA), now renamed the National Crime Agency, had approved the transfers to Malabu. It denied negligence.
The bank had previously said only that it “considers the allegations made in the claim to be unsubstantiated and without merit”.
JP Morgan did not provide a comment on the filing. Lawyers representing Nigeria did not respond to requests for comment.
It was not immediately clear whether JP Morgan’s acknowledgement that it knew of Etete’s links with Malabu will have any impact on the trial starting in Milan in May. Italian prosecutors were not immediately available for comment.
Eni’s chief executive is among those going on trial in Milan on charges of paying bribes to Etete and others, including sums that went to Malabu. Shell and Eni deny wrongdoing in relation to OPL 245.
Shell said in April last year that it “always knew” the Nigerian government would compensate Malabu and that Etete was involved. It had previously told Reuters that payments only went to the Nigerian government.
The lawsuit against JP Morgan said that although it received a request from Nigeria’s finance ministry to transfer funds to accounts controlled by Malabu, the bank showed gross negligence by not making further checks before allowing the transaction.
Denying negligence, JP Morgan said in its response that the transfers were authorised by designated government signatories for the Depository Account — the then finance minister and Nigeria’ s accountant general.
The bank also said it knew Etete was the beneficiary of Malabu by July 2011, one month before it made the transfers, and that by July 14, 2011, it “was aware of Etete’s conviction”.
“It is admitted that the order referred to Etete as Malabu’s principal. It is admitted that by 15 July 2011 JPMC (JP Morgan Chase) was aware of Etete and of his association with Malabu,” it said in the court filing.
JP Morgan also denied it should have been aware of Nigeria’s constitutional law or that it owed the government or state any further due diligence.