21st April 2020, London - Today the Italian government re-nominated Claudio Descalzi as CEO of Eni, Italy’s largest multinational company and the 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 President 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.
"The decision by the Italian government to confirm Descalzi as the CEO of Eni," said Antonio Tricarico of Re:Common in Rome, "despite the proceedings and investigations underway against him, is very disappointing and risks having serious consequences for Italy's credibility. 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".
“With such charges against him, someone in the position of Descalzi would not be confirmed as CEO to guide a strategic national company in Nigeria”, said Olanrewaju Suraju, of HEDA Resource Centre. “It is disappointing that so far international investors have raised few objections publicly. They face being complicit in this appointment”.
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.”
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. - Simon Taylor, Global Witness
The OPL 245 deal has also been under investigation in the Netherlands and United States while Nigerian authorities have filed charges against Eni and a Shell subsidiary as well as the former Nigerian Attorney General in Nigeria, they have all denied wrongdoing.
Goodluck Jonathan has denied wrongdoing and is not facing any charges. He has called the scandal a “fabricated bribery claim” and said he “did not ask for or collect any bribes, neither has he been charged for asking or collecting bribes, neither will he ever be charged with asking for or collecting bribes, because such never happened.”
Milan prosecutors have also been investigating allegations of corruption in Eni’s deals in the Republic of Congo where Claudio Descalzi himself has been accused of serious conflicts of interest after it was uncovered that Eni was in business with a company owned by Mr Descalzi’s wife. He has responded that he should merely have disclosed the link and the company has denied wrongdoing in its Congolese deals.
Last Friday, The Securities and Exchange Commission announced that Eni, which is listed on the New York Stock Exchange, agreed to settle charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA) in connection with an improper payment scheme in Algeria by Eni's 43% minority-owned and controlled subsidiary at the time, Saipem S.p.A. According to the SEC, “Eni is a recidivist, having been previously charged by the SEC in 2010 for violating the same FCPA provisions in connection with a bribery scheme in Nigeria by its then-wholly-owned subsidiary Snamprogetti Netherlands, B.V.” in the Bonny Island/ Halliburton corruption case.
"Eni now has the dubious distinction of being repeat offender with an alleged repeat offender back at its helm," comments 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."
Notes to editor:
- Eni is listed on the Borsa di Milano and the New York Stock Exchange. The Italian Ministry of Economy and Finance has de facto control of Eni SpA by virtue of interests held either directly or via the Cassa Depositi e Prestiti SpA (CDP).
- Eni’s annual shareholder meeting is scheduled for 13 May 2020. Investors will vote on Descalzi’s re-nomination and other appointments to the board at that time.
- Prosecutors in the Milan Trial of Shell and Eni have told the court this year that they believe that Eni executives sought to interfere with the testimony of witnesses, attempting to bribe one, while they also claimed that the company ordered surveillance against journalists, prosecutors and possibly even judges. A separate investigation by prosecutors is ongoing into allegations that a public prosecutor in Sicily was bribed to create fake investigations into critics of Eni’s CEO Claudio Descalzi including the company’s own board members and to try to interfere with the main anti-corruption investigation. Eni has said that it “categorically denies ever having set up any kind of information-gathering operations and considers itself a victim if any crime of obstruction shown to have been committed.”
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