Court Papers Expose Officials Who Authorised Malabu Deal Payments

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Court documents filed by United States banking giant, JP Morgan
Chase Bank, have revealed the Nigerian officials who authorised
payments of $875 million to accounts linked to a former Nigerian
oil minister in the fraudulent Malabu deal, Dan Etete.

The details are contained in a fresh claim filed by the bank to
counter the massive claim for damages filed by the Nigeria
government in 2017.

Those named to have authorised the payments, which were made in
2011, are Yerima Ngama, at the time Minister of State for Finance
and Otunla Ogunniyi, then Accountant-General of the Federation.

The two others named as authorised signatories at the time were
Danladi Kifasi, Permanent Secretary at the Federal Ministry of
Finance and Babayo Shehu, Director of Funds at the Office of the
Accountant-General.

Last November, the Nigerian government had sued the bank for
$875 million (N315 billion) in the London courts over its alleged
failure to block payments made from the massive Malabu oil deal
that is under a string of international corruption
investigations.

In the civil claim issued in the High Court, the Nigerian
government argued that JP Morgan had been “grossly negligent” when
it was banker to a previous government.

The claim alleged that JP Morgan did not act “with the
reasonable care and skill to be expected of a bank in compliance
with the laws of England and Wales” when it authorised enormous
payments resulting from the 2011 oil deal.

There was an “abuse of the banking system,” the claim said,
adding that JP Morgan “could and should” have done enough
reasonable due diligence to discover the deal involved the
“misappropriation” of up to $1.1 billion from state coffers.

It, therefore, demanded that the bank repay $875 million it paid
out to Mr. Etete, plus interest, and to account for the rest.

The bank, in its counter claim, submitted in the Business and
Property Courts of England and Wales, denied any wrongdoing.

The document, seen by Premium Times, was dated March 29 and
signed by Rebecca Smith, a representative of the bank’s
solicitor–Freshfields Bruckhaus Deringer LLP, London.

The bank admitted that on May 4, 2011, an escrow agreement was
concluded between the Federal Government of Nigerian, JP Morgan and
two other parties including Shell’s SNEPCO and Agip (Eni).

The government had earlier in April 2011 agreed to allocate the
controversial OPL 245 to both SNEPCO and NAE, with agreement that
the two parties will transfer $1,092,040,000 to a Nigerian
government’s escrow account with JP Morgan.

The bank, which became an ‘Escrow agent’ by the terms of the
deal, said it was obliged to receive the money and transfer to
accounts nominated by the Nigerian government but was not a party
to the Malabu Resolution deal.

NAE transferred the amount to the account in two instalments on
May 24, the documents revealed.

The bank claimed that by a letter from the then Minister of
State for Finance, Ngama, dated August 3, 2011, the Federal
Government of Nigeria informed the bank of new signatories to the
Depository Terms.

Ngama’s letter, it said, stated that instructions on the
depository account should be given by one “Category A” signatory
and one “Category B” signatory. While Ngama himself and Kifasi were
named as “Category A” signatories, Messrs Ogunniyi and Shehu were
named “Category B”.

On August 17, 2011, the bank said a written instruction signed
by Ngama and Ogunniyi instructed the bank to transfer the sum of
$401,540,000 and a separate $400,000,00 to two accounts in the name
of Malabu at First Bank and Keystone Bank, respectively.

On August 23, the bank said it completed telephone call-backs to
both Ogunniyi and Ngama to confirm their written instructions,
obtained go-ahead consent from UK’s Serious and Organised Crime
Agency (SOCA) before it subsequently made the transfers.

By July 3, 2011, the bank said it received another instruction
from Ngama and Ogunniyi requesting the transfer of $74,200,000 to a
Malabu account at Keystone Bank. Again, the bank said it completed
telephone call-backs to the duo to confirm the instruction and
obtained a SOCA go-ahead authorisation before it effected the
transfer of the fund.

In making both transfers, the bank said it acted pursuant to
valid, irrevocable and binding instructions given by the Federal
Government of Nigeria as it was required to do under the terms of
the Depository Agreement.

It also denied knowledge of the Nigerian government’s claims
that the Malabu Resolution Agreement was a “sham” because according
to its Depository Agreement, it stated that it had no knowledge of
any other agreement the Nigerian government was into as it was not
a party to it.

While Ngama was a political appointee of the Nigerian government
at the time, Ogunniyi, Kifasi and Shehu, were public servants. None
of them is currently facing prosecution over the Malabu
scandal.

Ogunniyi, however, is being prosecuted by the EFCC over a
separate money laundering case involving diversion of N2 billion
from the account of the Office of the National Security Adviser
(ONSA).

Few months after President Muhammadu Buhari assumed power in
2015, he approved the pre-retirement leave for Kifasi with effect
from October 20, 2015.

Ngama, now a leader of the APC, defected to the ruling party
after he lost in his bid to contest as governor in Yobe State on
the platform of the Peoples Democratic Party (PDP) in 2015.

It had been earlier reported that when invited for questioning
by the Economic and Financial Crimes Commission (EFFC), the former
minister of state for finance said he acted based on the directive
of then President Jonathan.

The then Attorney-General of the Federation, Mohammed Bello
Adoke, who is on exile, said in a statement in 2016 that his office
helped the country broker the agreement between Malabu Oil and Gas
Limited and Shell Nigeria Limited to prevent Nigeria from paying a
fine of $2 billion as damages for breach of contract.
The EFCC later filed charges against him and Etete.

The notorious Malabu deal, over OPL245, involved Shell, Italian
oil company Eni, Etete, a former President Jonathan and his then
oil minister, Dieziani Alison-Madueke.

In March, an Italian court adjourned the trial of Shell and Eni
and its former executives to May, 2018. All of them have
consistently denied any wrongdoing.

Etete, who remains unreachable, has also denied wrongdoing.

Similarly, Jonathan, who is not facing trial and under whose
administration the deals were struck, has also denied
wrongdoing.