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Nigeria sues JP Morgan for millions
January 28, 2018, 5:00 pm
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Federal government in Nigeria has filed a claim against US-based multinational banking and financial services firm,JP Morgan Chase, for more than $875 million. The government is suing the firm for negligence in transferring funds from a disputed 2011 oilfield deal to a company controlled by the country's former oil minister.

The suit filed in British courts, relates to the alleged corruption-tainted purchase of the offshore OPL 245 oilfield in Nigeria by oil majors Royal Dutch Shell and Eni in 2011. At the core of the case is a $1.3 billion payment from Shell and Eni to secure the block, which the government lawsuit says was deposited into a Nigerian government escrow account managed by JP Morgan.

The lawsuit added that JP Morgan then received a request from Nigerian finance ministry workers to transfer more than $800 million of the funds to accounts controlled by the previous operator of the block, Malabu Oil and Gas, itself controlled by former oil minister Dan Etete.

The lawsuit pointed out 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 lawsuit, first reported 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.

But a spokeswoman for JP Morgan, dismissed the accusation, saying the firm "considers the allegations made in the claim to be unsubstantiated and without merit".

Late last year, a Milan judge ruled that Shell and Eni must stand trial in Italy, where Eni is headquartered, for a separate legal case in which Milan prosecutors allege bribes were paid to Etete and others as part of the same oilfield deal, including sums that went to Etete's Malabu.

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