Malabu Oil Fraud Scam: Nigeria, UK Stunned By Italy’s Claim To Frozen Funds

A reliable source from Nigeria’s Ministry of Justice has briefed our correspondent about a simmering dispute between the United Kingdom, Italy and Nigeria over the Malabu funds that were frozen in the UK and Switzerland at the request of the Public Prosecutor of Milan (PPM).

The dispute has arisen because, after initially securing the support of the UK and Nigeria on the basis that the money belongs to Nigeria, the Italians have now done a complete about-turn and are attempting to claim that the money belongs to Italy.

The Italian volte face is considered astonishing since the Milan prosecutor, in requesting initially that the funds be frozen, had clearly stated that the money belonged to Nigeria. The prosecutor had also asserted that the funds had been unlawfully diverted by Italian oil corporation Eni, its executives, their associates and some high level Nigerian government officials.

When the UK Crown Prosecution Service (CPS) acted on the Milan request to freeze the funds in the UK, it similarly stated in legal filings in the UK that the money belonged to Nigeria and had been unlawfully diverted to Malabu.

When Malabu subsequently challenged the freezing order, the judge in rejecting the firm’s request wondered why the Nigerian government had not intervened to claim the funds.

The Ministry of Justice under President Muhammadu Buhari subsequently intervened successfully in the UK court by claiming Nigeria’s ownership of the funds. The Italians were then asked to lift the freezing order so that the money could be claimed by Nigeria. To the shock of the multinational parties involved in the Malabu scandal, the Italians declined to cooperate with Nigeria’s bid to reclaim the funds. Instead, Italian officials made the spurious claims that the funds, which had been paid to Malabu out of the Federal Government of Nigeria’s (FGN) account at JP Morgan, belonged to Italy.

Nigeria’s Ministry of Justice officials say the Italian betrayal was a matter of extreme concern, noting that the Ministry had cooperated extensively with the Italians to ensure the success of the investigations and subsequent prosecutions in Nigeria and Italy and the return of the funds to Nigeria.

“Throughout the period of our collaboration the Italians indicated that they would return the funds to Nigeria, but would require a nominal fee to cover the cost of their prosecution,” a Nigerian official involved in the long-running legal drama told SaharaReporters.

However, at a meeting last month in Milan between Italian, UK and Nigerian officials to discuss the lifting of the freezing order so that the funds could be returned to Nigeria, the Italians shocked the Nigerians and the British by outrageously arguing that the money belonged to Italy.

The Italian officials’ argument was that Eni, which paid the money into the FGN account, was a state-owned company.

A source at Nigeria’s Ministry of Justice said he was shocked and disappointed by the Italians’ volte face. He said Nigeria promptly informed the Italians that future cooperation on the Italian prosecution could not proceed while the Italians were disputing Nigeria’s ownership of the funds.

Our correspondent learned that officials of the UK Crown Prosecution Service were also miffed by the Italian position. “The British, who had been openly critical of the Italians’ handling of the initial request to freeze the funds, have also been highly critical of the Italian claim to the funds,” our source disclosed.

The British reportedly cautioned the Italians about the image damage that could arise if it became public that the Italians were disputing Nigeria’s ownership of the funds.

SaharaReporters