Eni SpA Chief Executive Officer Claudio Descalzi is under investigation for his role in a $1.1billion acquisition of an oil field in Nigeria.
Milan prosecutors have placed Descalzi and Eni’s chief development, operations and technology officer under “preliminary investigation,” the Rome-based company said today in a statement distributed by the Italian stock exchange. Eni, which didn’t specify the nature of the probe, “continues to deny any illegal conduct,” it said.
Descalzi is suspected by prosecutors of playing a role in the corruption of Nigerian politicians and bureaucrats, Italian newspaper Corriere Della Sera reported today. The oil-license deal, closed in 2011 when Descalzi was Eni’s head of exploration and production, previously came under scrutiny in the Nigerian Parliament.
Eni’s stock dropped 1.8% to EUR18.73 at 1.47pm in Milan trading, the biggest decliner in the FTSE MIB Index.
“The market didn’t react violently because it doesn’t think that this can compromise the business,” said Massimo Intropido, head of Milan-based financial research firm Ricerca Finanza.
Eni teamed with Royal Dutch Shell Plc in 2011 to buy Oil Prospecting License 245 for $1.1billion. The deal was challenged last year by a Nigerian parliamentary committee, which recommended revoking the rights. The acquisition process was “highly flawed,” the committee said. Global Witness, a London-based corruption watchdog, has also criticized the deal and the involvement of Dan Etete, a former Nigerian oil minister.
Calls by Bloomberg News to the offices of Fabio De Pasquale and Sergio Spadaro, the two Milan prosecutors cited in the Corriere report, went unanswered. Shell didn’t immediately respond to a request for comment.
Descalzi was promoted to CEO in May in the biggest corporate appointment under the watch of Italian Prime Minister Matteo Renzi. Italy controls Eni through the Treasury and a 26% stake owned by state lender Cassa Depositi e Prestiti SpA