Nigeria Seeks $1.7B From JP Morgan Over ‘Gross Negligence’

JP Morgan

Nigeria said JPMorgan was “grossly negligent” in transferring funds to the country’s disgraced former oil minister, and is suing the firm for $1.7 billion.

The claim is at the center of a civil lawsuit being heard this week in London, stemming from a 2011 oil deal. According to multiple media accounts Wednesday (Feb. 23), the trial is the result of a suit filed in 2017, which relates to Shell and Eni’s purchase of the OPL 245 oilfield in Nigeria.

The country is seeking damages of $875 million, as well as interest, which brings the total to $1.7 billion. The amount was sent to former oil minister Dan Etete’s company Malabu Oil and Gas instead of to the government. Court documents show the Nigerian government at the time asked JPMorgan to make these transfers as part of the sale.

“J.P. Morgan is confident that it acted appropriately in making these payments, which were authorized by senior representatives of the Nigerian government, and only processed following extensive engagement with law enforcement and other agencies and courts. We will robustly defend against this claim,” a spokesman for the bank said.

Read more: JPMorgan, Citi, Other Banks May Face Suit In UK For Alleged Exchange Rigging

The Nigerian case began in 1998, when Sani Abacha, Nigeria’s military ruler, gave an oilfield license to Etete’s company. The price tag was $20 million, but court documents say Etete paid just $2 million, a number industry experts pegged as too low given the field’s earning potential.

Etete later handed over the undeveloped field to Nigeria as part of an agreement involving involving Shell and Eni. Those oil companies paid a bonus of around $200 million to the Nigerian government and deposited $1.1 billion in the government’s escrow account with JP Morgan, court documents say.

According to Reuters, a spokesman for the Nigerian government said the London case would hold JP Morgan accountable.

“JP Morgan was on clear notice that the payments put its customer, the Federal Republic of Nigeria, at risk of being defrauded which was what, indeed, happened,” he said.