BUSINESS Abuja seizes massive oil bloc

Nigeria prepares to prosecute Shell, Eni Chinese fuelling price rise in Hong Hong real estate

LAGOS: NIGERIA is seizing back one of Africa’s richest oil blocs and will prosecute petroleum giants Shell and Eni in a $1.2 billion (R16.18bn) corruption scandal that has drawn investigators from the US, Italy, France, Switzerland and Holland, according to a Nigerian Federal High Court document.

The court on Thursday ceded control of Oil Prospecting Licence 245 to the government while the country’s Economic and Financial Crimes Commission investigates and prosecutes suspects in the “Malabu Oil scam” according to the commission.

The commission’s petition to the court says Dutch-British corporation Shell and Italian Agip, now Eni, bought the bloc in 2011 knowing the transaction was “fraught with fraud” and that the $1.2bn payment to former petroleum minister Dan Etete and his allies was a bribe.

The state oil company got only $210 million from the deal.

The government is preparing further charges of “conspiracy, bribery, official corruption and money-laundering” against Shell and Eni, the petition says.

Criminal charges already have been filed against both companies and several executives in an Italian court in Milan.

“This is historic. Generations of Nigerians have been robbed of life-saving services while oil men have grown rich at their expense,” said Simon Taylor of the anti-corruption body Global Witness. “Companies and their investors must understand they can no longer do back-door deals with corrupt officials without paying a hefty price.”

Eni has not received notification of the court order, spokesperson Roberto Carlo Albini said.

“Eni denies any wrongdoing,” he said. Shell Nigeria spokesperson Bamidele Olugbenga Odugbesan said he had no comment.

The oil companies paid the $1.2bn into a Nigerian government escrow account at the London branch of JPMorgan Chase, and former justice minister Mohammed Bello Adoke authorised its distribution.

The commission last month filed charges of fraud and money laundering against Etete, Adoke and businessman Aliyu Abubakar.

The petition says Nigeria’s former military dictator General Sani Abacha and Etete used front men to form Malabu Oil and Gas Ltd and illegally awarded themselves OPL 245.

After Abacha’s mysterious death in 1998, the company directors and shareholding was fraudulently altered to divest Abacha’s son, Mohammed, it says.

The Malabu bloc was seized by the government once before, by the civilian government of Olusegun Obasanjo in 2001.

Malabu Oil sued and an-outof-court agreement returned the bloc to the company. – ANA HONG KONG: Mainland Chinese companies have piled into Hong Kong property in 2015/16, outbidding some of the territory’s most powerful developers to gobble up 29% of land sold for development in one of the world’s most expensive real estate markets, according to new industry figures.

That is almost a six-fold increase from their purchases of 5% of the land sold in public land auctions in 2013 and 2014, the data from real estate broker Midland Realty shows.

The buying frenzy comes when home prices in Hong Kong have reached new record highs, bucking government cooling measures, and potentially fuelling discontent in a city whose population is under strain from high living costs and a widening wealth gap.

Nearly 200 000 residents, half of them under the age of 35, have resorted to living in wire cages, half of a bunk bed, or partitioned apartments often smaller than car park spaces.

The purchases by the likes of HNA Group and China Overseas Land & Investment drove mainland institutional investment in real estate to $6.6 billion last year, according to DTZ/Cushman & Wakefield, compared with $1.46bn in 2015.

The land grab is set to drive sky-high apartment prices up even further, realtors said.

Denis Ma, head of research at real estate services firm JLL in Hong Kong, said luxury apartments to be built on HNA Group’s latest plot of land, purchased for $713 million at the former airport site of Kai Tak, could fetch $3 200 per square foot, almost 40% higher than residential units sold recently in the area.

Hong Kong will auction a site valued at as much as $2.2bn in the first quarter, the first sale of commercial land in the central business district in more than 20 years, and it is widely expected to be snapped up by a mainland Chinese developer, market participants said.

The dominance of Hong Kong’s wealthy property tycoons is being challenged as many are unwilling to compete with spiralling prices.

The strong rise in overseas property investment and an increase in deals for other foreign assets has alarmed Chinese authorities and they have stepped up measures to stem capital outflows in the face of a weakening currency.

The crackdown by Beijing has delayed some deals. – Reuters