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

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

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’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 pre-empt 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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