Saturday, Sep 19th 2020 1:15 PM

Market Digest Nigeria


Italy’s prosecutor calls for eight-year jail term for Eni chief Claudio Descalzi

Claudio Descalzi

A prosecutor in Milan asked for eight years of jail time for Eni CEO Claudio Descalzi over an allegedly corrupt $1.1bn Nigerian oil deal.

Claudio Descalzi

The court should reach a conclusion later in 2020 on the accusation that most of that payment was distributed as bribes. Any verdict could be subject to a long appeals process.

In his closing arguments on Tuesday, prosecutor Fabio de Pasquale asked the court in Milan for the sentence for Descalzi, who oversaw the company’s oil exploration and production unit at the time. The CEO denies any wrongdoing and he was reappointed to the position by the Italian government in April.

Several former executives of Eni and Royal Dutch Shell are also on trial. The prosecutor sought eight years for Eni’s former CEO Paolo Scaroni and seven years and four months for Malcolm Brinded, who ran Shell’s exploration and production division at the time. He also requested the seizure of $1.09bn from each of the companies.

Shares of Eni were unchanged at €8.93 as of 9.12am in Milan on Wednesday, while Shell rose 0.6% to 1,259 pence in London.

The companies and individuals accused have consistently denied any wrongdoing. Eni said in a statement on Tuesday that the prosecutor’s requests are “completely groundless.” Shell said it does not believe there is a basis to convict the company or any of its employees in Milan.

The allegation is that the executives involved in the 2011 deal to secure the offshore Oil Prospecting License 245 knew that the money that they deposited in an escrow account controlled by the Nigerian government would be disbursed as bribes. In 2018, two middlemen were found guilty of corruption in a separate trial related to the transaction.

The prosecution has suffered several setbacks. In January, Isaac Eke, a high-ranking retired Nigerian police officer, failed to corroborate the corruption allegations. In March 2019, a retired Swiss oil executive withdrew accusations against Shell and Eni executives, saying earlier statements that they were part of a network of bribes and kickbacks had been made under pressure.

The Italian system has three rounds of sentencing before coming to a final conviction. The first of these is expected to come by the end of 2020.

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