MALABU SCANDAL: Activists kick as Italy appoints accused official as Eni CEO

The Italian government has re-nominated Claudio Descalzi as Chief Ececutive Officer of Eni, Italy’s largest multinational company and the country’s largest foreign oil producer in Africa.

Mr Descalzi is set to maintain the leadership role despite an ongoing criminal trial over corruption allegations surrounding the billion dollar 2011 acquisition by Shell and Eni of Nigeria’s OPL 245 oil license.

Italian prosecutors allege that the $1.1bn paid by Eni and their partner Shell for the OPL 245 licence was used to pay former Nigerian oil minister Dan Etete and was “intended for payment to a former Nigerian president, Goodluck Jonathan, members of the government, and other Nigerian public officials”.

Eni and Shell, and several of their senior managers including Mr Descalzi are currently standing trial, charged with aggravated international corruption. If convicted, the offences carry seven-year jail terms.

Mr Descalzi, both companies and all other individuals in the case have pleaded not guilty and the trial is currently delayed by the Covid-19 crisis.

Scandal

The controversial Malabu deal was struck in 2011 under former President Goodluck Jonathan. The arrangement saw the Nigerian government stand as a negotiator in the controversial sale of the oil block in offshore Nigerian waters.

Two international oil firms, Shell and Eni, paid out about $1.1 billion to Nigerian government accounts in the UK, which then transferred most of the money to Malabu, a company then controlled by Nigeria’s former petroleum minister, Dan Etete.

It was Mr Etete’s Malabu that transferred the over $500 million to accounts controlled by Mr Abubakar, who is also being prosecuted in Nigeria for his role in the scandal.

The payout immediately became a subject of cross-border investigation spanning over six countries. Several Nigerian government officials were believed to have received several millions of dollars in bribes for the enabling roles they played.

A larger trial including Shell, Eni and 13 other defendants is ongoing in Italy.

Those on trial include Eni’s current CEO, Claudio Descalzi; former CEO Paolo Scaroni, and Chief Operations and Technology Officer Roberto Casula alongside four former Royal Dutch Shell staff members including Malcolm Brinded, former Executive Director for Shell’s Upstream International operations, and two former MI6 agents employed by Shell.

“Eni now has the dubious distinction of being repeat offender with an alleged repeat offender back at its helm,” said Nicholas Hildyard of Corner House.

“Other companies in Italy have adopted Government-promoted ‘honourability’ rules governing the appointment of directors but Eni refused to do so. Had they been in place, Descalzi would likely have been precluded from consideration as CEO. If the Milan court finds the company and Descalzi guilty, shareholders may well choose to punish Eni’s dinosaur approach to corporate governance.”

Activists Kick

Meanwhile, anti-corruption groups, activists and other concerned stakeholders have kicked against the appointment of Mr Descalzi.

“The decision by the Italian government to confirm Descalzi as the CEO of Eni despite the proceedings and investigations underway against him, is very disappointing and risks having serious consequences for Italy’s credibility,” said Antonio Tricarico of Re:Common in Rome.

“Especially now that our country is seeking money on international markets and from European partners to deal with the economic emergency arising from the Covid-19 crisis. The plea bargain enforced by the SEC in the U.S. is a clear signal that international institutions demand credibility from those who run the largest Italian multinational.

“And it is clear that Descalzi is unfit to lead Eni. The time has come for Eni’s international investors to act responsibly and challenge this appointment by the Italian government instead of washing their hands”.

Olanrewaju Suraju of HEDA Resource Centre maintained that with such charges against him, someone in the position of Mr Descalzi would not be confirmed as CEO to guide a strategic national company in Nigeria.

“It is disappointing that so far international investors have raised few objections publicly. They face being complicit in this appointment,” he said.

Simon Taylor, a Director of Global Witness said: “It is appalling that Mr Descalzi can be considered the best candidate to lead one of Italy’s flagship companies with such serious allegations hanging over his head. The Italian Government should explain their decision to ignore the allegations made by Milan’s Prosecutors.”