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JP Morgan ‘sent $800m to Nigerian fraudster Dan Etete’

An agreement was struck under which Malabu would be paid to give up the licence, which would then be sold to Shell and the Italian oil company Eni.

17 Dec 2017

The Nigerian government is suing JP Morgan for $875m (£660m), alleging the Wall Street banking giant acted as the middleman in an illegal oil deal and made payments to a convicted money launderer.

Papers filed with the High Court in London claim that in 2011 the bank transferred money to a company controlled by Dan Etete, a former oil minister in the Nigerian government. He had previously been convicted of money laundering by French courts and is being pursued by Nigerian authorities.

JP Morgan was “grossly negligent” in handing over more than $800m “without proper application or regard to its obligations”, the court documents allege.

Etete served under the military dictator Sani Abacha in the 1990s.

The Nigerian authorities maintain JP Morgan “failed in its duty of care” and “could and should” have done more to spot that the deal involved “misappropriation” of money from the state.

At the centre of the dispute is a payment to Malabu, an oil company controlled by Etete which was awarded an exploration licence while he was minister. It covers what is thought to be Africa’s biggest source of untapped reserves.

An agreement was struck under which Malabu would be paid to give up the licence, which would then be sold to Shell and the Italian oil company Eni. JP Morgan was to handle all transactions.

The Nigerian government claims the agreement was “merely a device” by officials inthe government of former president Goodluck Jonathan “to perpetuate the sham” that Malabu had been awarded the licence legally.

Multiple attempts to make payments to accounts in Switzerland and Lebanon were blocked, and the failure of these transactions should have raised red flags, claims the Nigerian government.

However, in August 2011, JP Morgan agreed to send $801.5m to Malabu accounts in Nigeria “without any real inquiry … without further or enhanced due diligence”, say the court papers.

JPMorgan said: “We consider the allegations made in the claim to be unsubstantiated and without merit.”

The Nigerian government has brought money laundering charges against Etete and Nigeria’s former attorney-general, Mohammed Adoke.

“The case against Adoke and Etete, who are at large, is still pending,” say the High Court documents.

Separately, the deal involving Shell and Eni is under investigation by Italian prosecutors. A judge in Milan will decide on Wednesday whether the case should go to trial.

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