The fallout of the fraudulent sale of OPL 245 popularly known as the Malabu oil fraud for $1.3 billion continues as the Nigerian government has filed an $875 million legal claim against JP Morgan Chase in which it accuses the US investment bank of acting as an intermediary in an illegal offshore oil deal.
The lawsuit filed at the High Court in London claims that JP Morgan was “grossly negligent” in enabling the 2011 transfer of more than $800 million to a company controlled by Dan Etete, a former oil minister who had previously been convicted of money laundering in France. The transfer was linked to the purchase of a disputed offshore oilfield by Royal Dutch Shell and ENI, which paid $1.3 billion to secure the property.
The lawsuit said that JP Morgan then transferred the funds to two accounts controlled by Etete, without sufficient due diligence to make sure the money did not leave accounts controlled by the Nigerian government.
The filing seen by Reuters was made in London in November on behalf of the Federal Republic of Nigeria and says that JP Morgan acted with gross negligence by allowing the transfer of the money without further checks. It said JP Morgan should have known that, under Nigerian law, the money should never have been transferred to an outside company.
“If the defendant acted with reasonable care and skill and/or conducted reasonable due diligence it would or should have known or at least suspected … that it was being asked to transfer funds to third parties who were seeking to misappropriate the funds from the claimant and/or that there was a significant risk that this was the case,” the filing said.
The spokeswoman for JP Morgan, according to Reuters, dismissed the accusation on Thursday, saying the firm “considers the allegations made in the claim to be unsubstantiated and without merit”.