Two Middlemen Found Guilty in Milan Trial Over Nigeria Oil Graft

LAGOS (Capital Markets in Africa) – Two middlemen were found guilty of corruption in Milan in a case related to an oil deal involving Royal Dutch Shell Plc, Eni SpA and the Nigerian government.

Emeka Obi and Gianluca Di Nardo were found by a court to have helped arrange a payment between the oil companies and the Nigerian government for an oil license in the country, which largely went to pay bribes. The verdict could help bolster Italian prosecutors’ case against Shell and Eni.

Shell said neither men worked on its behalf. “Based on our review of the prosecutor of Milan’s file and all of the information and facts available to us, we do not believe that there is a basis to convict Shell or any of its former employees of alleged offences related to Oil Prospecting Licence 245 in Nigeria,” the company said in a statement. Eni didn’t immediately comment on the ruling.

The judgement is part of a broader investigation involving high-ranking former and current executives at the companies, including Eni Chief Executive Officer Claudio Descalzi and former Shell upstream director Malcolm Brinded. The trial for the executives and companies is ongoing and will likely extend into next year. Obi and Di Nardo both opted for “fast-track” trials, in which they were not able to call witnesses.

Both men were sentenced to four years in prison, though they can appeal the decision. The court also seized over $100 million from Obi and Di Nardo.

In 2011, Shell and Eni paid the Nigerian government $1.1 billion for a license to drill in deep waters in the Gulf of Guinea. The ownership of the permit had been disputed for years. It was originally awarded in 1998 by the country’s military dictator, Sani Abacha, to Malabu Oil and Gas Ltd., a Lagos-based company connected to then-Petroleum Minister Dan Etete.

A prosecutor in Milan alleges that most of the $1.1 billion was used to pay bribes, including to Etete, and that the companies were aware of the payment. Both Shell and Eni have vigorously denied that they knew of any corruption linked to the deal, and have said they don’t think bribes were paid at all.

The next hearing in the wider case involving the companies is scheduled to be held in Milan on Wednesday.

Source: Bloomberg Business News