JP Morgan Chase has denied negligence over the transfer of more than $800m to Malabu Oil and Gas from the payment made for the purchase of an offshore oilfield, Oil Prospecting Licence 245, by Royal Dutch Shell and Eni in 2011.
The United States lender, however, acknowledged that it knew a former Nigerian Minister of Petroleum Resources, Dan Etete, convicted of money laundering, would benefit when it transferred the funds to a company he controlled.
JP Morgan made the acknowledgement in its legal response to a lawsuit filed by Nigeria over transactions made by the US bank when Shell and Eni bought OPL 245 from Malabu Oil and Gas in 2011, according to Reuters.
It said in its response that the transfers were authorised by designated government signatories for the depository account — the then Nigeria’s finance minister and the accountant general.
The bank also said it knew Etete was the beneficiary of Malabu by July 2011, one month before it made the transfers, and that by July 14, 2011, it “was aware of Etete’s conviction.”
“It is admitted that the order referred to Etete as Malabu’s principal. It is admitted that by July 15, 2011, JPMC (JP Morgan Chase) was aware of Etete and of his association with Malabu,” it stated in the court filing.
JP Morgan also denied that it should have been aware of Nigeria’s constitutional law or that it owed the government or state any further due diligence.
The lawsuit against JP Morgan said that although it received a request from Nigeria’s Finance Ministry to transfer funds to accounts controlled by Malabu, the bank showed gross negligence by not making further checks before allowing the transaction.
Shell and Eni are accused of corruption in the purchase of the oil block, which is estimated to hold nine billion barrels of crude in reserves.