Nigeria sues JP Morgan bank over fraudulent deal

The federal government of Nigeria has filed an $875 million lawsuit against JP Morgan Chase over the

Dan Etete, who was appointed petroleum minister by late dictator Sani Abacha, acquired the rich “OPL 245” through his company, Malabu Oil and Gas Limited in 1998.

What the heck is Malabu oil deal?

Using the powers of his office, Etete illicitly awarded Oil Producing License (OPL) 245 to himself.

He paid only $2million out of the $20million legally required by the State to acquire it.

The Malabu oil field contains about 9 billion barrels of crude oil. It was sold to Shell and ENI for $1.3billion during the Goodluck Jonathan administration.

Shell and ENI did not want to deal directly with Etete who had been convicted in France for his part in a separate money laundering scandal, so they wired the money to an account belonging to the Federal Government of Nigeria domiciled with JP Morgan bank, London.

The Federal Government of Nigeria under Jonathan thereafter transferred $801 million of the money into accounts controlled by Malabu and Etete in Nigeria.

Investigators say the money was then shared to various public officials and cronies in Nigeria as bribes; with the government receiving only $210m USD as signature bonus on OPL 245.

Who are those suspected to have benefited from the Malabu deal?

Former government officials accused of receiving bribes in connection with the deal include Goodluck Jonathan who was Nigeria's president until 2015, former Attorney General, Mohammed Bello Adokeand former petroleum minister, Diezani Alison-Madueke who has been implicated in a host of illicit deals during her spell as petroleum minister.

reports that Nigeria has now filed “a claim against JP Morgan Chase for more than $875million, accusing it of negligence in transferring funds from a disputed 2011 oilfield deal to a company controlled by the country’s former oil minister”.

The suit was filed in British courts.

Here's the federal government's position

The federal government says “JP Morgan acted with gross negligence by allowing the transfer of the money without further checks”.

The government posits that 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,” some parts of the suit instituted by the federal government, read.

Reuters says a spokeswoman for JP Morgan dismissed the accusation on Thursday.

Reuters quotes the spokeswoman as saying JP Morgan “considers the allegations made in the claim to be unsubstantiated and without merit”.

Ex AGF Adoke says he played his part in the deal as instructed by then President Goodluck Jonathan.

Former president Jonathan has refused to honour a House of Reps invitation concerning the deal. He has also denied any wrong doing.