Mal­abu scam: Shell, Eni file probe find­ings with US au­thor­i­ties

The Punch - - BUSINESS & ECONOMY - ’Femi Asu with agency re­port

ROYAL Dutch Shell and Eni have vol­un­tar­ily filed to United States’ au­thor­i­ties in­ter­nal probes into how they ac­quired a gi­ant field in Nige­ria as the com­pa­nies seek to fight cor­rup­tion al­le­ga­tions in Europe and Africa.

The fil­ings, to the US Depart­ment of Jus­tice and the Se­cu­ri­ties and Ex­change Com­mis­sion, do not mean US au­thor­i­ties are in­ves­ti­gat­ing Shell or Eni, Reuters re­ported on Tues­day.

But the move shows the com­pa­nies are try­ing to pre­empt ques­tions from the US as they face one of the oil in­dus­try’s big­gest-ever graft tri­als in Italy, to be­gin in May in Mi­lan, a pend­ing trial in Nige­ria and an in­ves­ti­ga­tion in the Nether­lands.

The oil ma­jors are ac­cused of cor­rup­tion in the 2011 pur­chase of Oil Prospect­ing Li­cence 245, an off­shore oil block in Nige­ria es­ti­mated to hold nine bil­lion bar­rels of crude in re­serves.

Last week, a Mi­lan court post­poned the trial of the two com­pa­nies, which was sched­uled to be­gin on March 5 to May 14, and trans­ferred the case to an­other cham­ber.

Ital­ian prose­cu­tors al­leged that bribes were paid in an ef­fort to se­cure rights to the block in 2011. A num­ber of top ex­ec­u­tives from both com­pa­nies, in­clud­ing Eni’s Chief Ex­ec­u­tive Of­fi­cer, Clau­dio Descalzi, and for­mer Shell Foun­da­tion Chair­man, Mal­colm Brinded, will face trial.

Un­der Ital­ian law, a com­pany can be held re­spon­si­ble if it is deemed to have failed to pre­vent, or at­tempt to pre­vent, a crime by an em­ployee that ben­e­fited the com­pany.

Both com­pa­nies’ shares are traded on US stock ex­changes, putting their for­eign deal­ings in the scope of US au­thor­i­ties.

Shell and Eni, on be­half of sub­sidiaries, in 2010 en­tered de­ferred prose­cu­tion agree­ments with the Depart­ment of Jus­tice over sep­a­rate Nige­rian cor­rup­tion al­le­ga­tions.

Those pacts dis­missed charges af­ter a cer­tain pe­riod in ex­change for fines and an agree­ment to ful­fil a num­ber of re­quire­ments. They con­cluded in 2013 and 2012, re­spec­tively.

“A com­pany’s dis­clo­sure of al­leged for­eign cor­rup­tion to both the SEC and the DOJ in the US typ­i­cally means the com­pany be­lieved US au­thor­i­ties needed to be made aware of this, and both agen­cies have the au­thor­ity to pros­e­cute un­der the For­eign Cor­rupt Prac­tices Act,” Pablo Quiñones, ex­ec­u­tive di­rec­tor of the New York Univer­sity School of Law pro­gramme on cor­po­rate com­pli­ance and en­force­ment, was quoted as say­ing by Reuters.

Eni noted its dis­clo­sure in a SEC fil­ing, in which it said “no ev­i­dence of wrong­do­ing on Eni side were de­tected.” Shell has said pub­licly that it sub­mit­ted the in­ves­ti­ga­tion to US au­thor­i­ties and to Bri­tain’s Se­ri­ous Fraud Of­fice.

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