Press Release

Date: 8 January 2020
Oil trading company, Napag Trading Limited, and CEO Francesco Mazzagatti issue legal proceedings against Italian newspapers L’Espresso and Il Fatto Quotidiano

Napag Trading Limited and its CEO, Francesco Mazzagatti, have issued
proceedings for libel against L’Espresso and Il Fatto Quotidiano, in relation to
articles published in October and November 2019.

The articles are gravely defamatory of Napag Trading Limited and Mr
Mazzagatti, including false allegations of concluding transactions involving oil
originating from sanctioned countries and of illegal transactions with Italian
company ENI. Some of the articles also falsely alleged that Napag Trading
Limited was being used and managed by Piero Amara.

Napag Trading Limited and Mr Mazzagatti deny these unfounded and false
allegations in the strongest terms. They reiterate that all business conducted by
Napag Trading Limited and the companies in the Napag group are conducted
and managed by the companies’ representatives, and in compliance with all
applicable laws and regulations.

A detailed rebuttal is annexed to this press release.
Napag Trading Limited and Mr Mazzagatti are represented by Nigel Tait
(Nigel.Tait@carter-ruck.com).

 

Annex to press release: detailed rebuttal

1. It is false that Napag ever operated in any industry other than the trading
of petroleum products and petrochemical products. When the company
was incorporated by Mr Mazzagatti in 2012, it was assigned a very large
number of activity codes. This is usual practice in Italy, as it allows a
company greater flexibility when it develops its business – only a basic
understanding of the way in which Italian companies are registered is
required to understand that a company is ordinarily inclusively registered
in order not to impose unnecessary limits should it later decide to expand
or change its areas of operation. The implication that Rocco Mazzagatti,
was or has been involved with Napag Italia is also untrue. He was (and
is) not involved.

2. It is false that Messers Amara and Des Dorides concluded deals on
Napag’s behalf: neither has ever done so. At the time of the relevant
events, Napag was accredited as a supplier by ENI (the Italian state oil
company). Alessandro Des Dorides acted for ENI on a number of the
negotiations which led to the transactions between Napag and ENI. At no
stage did he act for or on behalf of Napag. He was acting for Napag’s
counterparty, ENI, and therefore representing different interests to those
of Napag. As set out more fully below, Mr Amara acted for a time as
Napag Italia SRL’s external lawyer but was not authorized to (and did
not) enter into any contracts on its behalf.

3. It is false that three prosecutors ‘offices (Messina, Rome and Milan)
started investigating Napag in 2018: following inquiries made by Napag
to the relevant prosecutors’ offices, they have received confirmation that
only one inquiry is ongoing, being carried out in the Milan office
following a transfer from the Rome office. Napag and Mr Mazzagatti are
confident that this inquiry will reveal no basis for any further action
against them.

4. It is false that the quality certificate for the White Moon oil cargo has
disappeared: Napag maintains a copy of the certificate and all the
relevant parties received a copy of the certificate.

5. It is false that on 9 June 2019, ENI managers Francesco Galdenzi and
Stefano Ballista met with Oando representative Omamofe Boyo in
London, and questioned the quality of the White Moon oil cargo. The
alleged contents of the conversation (during which Mr Boyo allegedly
informed ENI representatives that Napag Trading Limited had supplied
the cargo to Oando, that the arrangements had been made with Mr Des
Dorides on Napag Trading Limited’s behalf but that Oando was asked to
cover up Mr Des Dorides’ involvement) are similarly false. Mr Boyo
denies having ever said this, as well as the existence of this
conversation, and is prepared to give evidence to that effect.

6. It is false that as at the date of publication of the second L’Espresso
article, 25 October 2019, Napag had not yet filed consolidated accounts:
these were filed on 22 October 2019, within the period allowed by
Companies House for doing so (which expired on 29 October 2019).

7. It is false that Mr Mazzagatti and his wife, Ms Al Matrook, are not
registered at the same address. The second L’Espresso article pointedly
refers to the law in the UAE preventing unmarried couples from living
together, thereby implying that the couple are not in fact married. That is
untrue – Mr Mazzagatti and Ms Al Matrook are married, and live at the
same address in the UAE with their daughter. The two addresses
identified from corporate administrative documentation are in fact just
alternate postal addresses for the same villa. Had proper checks been
carried out or had the issue been raised with Napag or Mr Mazzagatti in advance of publication, this distressing allegation (with the specific risks
it carries in the UAE) could have been avoided.

True facts

Francesco Mazzagatti set up Napag Italia in Italy in 2012.
Napag Italia was supported by a government accelerator program designed
to encourage foreign direct investment, and it grew fairly quickly.

The Napag Group’s development
Following its growth, it was decided by the owners of Napag Italia that in order
to best develop the international oil trading business there should be additional
companies. Napag Trading Limited was incorporated in London and in Dubai
Napag Middle East FZCP was incorporated. London is the global center of oil
trading, and Dubai provides access to the Middle East market.

Napag Trading is the parent company, with both other companies being its
subsidiaries. Napag Trading is incorporated in England, and is registered for
activities relating to the wholesale of petroleum, petroleum products and other
fuels and related products. Napag has complied with all registration and
corporate requirements in the UK, as highlighted on the publicly searchable
Companies House website.

Napag is owned by Francesco Mazzagatti and his wife. There is no form of co
ownership, or of hidden ownership of the company.

Alleged links with Simest
In 2015 Napag Italia proposed a project for the construction of a logistics
center in the Free Zone area of ​​the port of Dubai. In the context of this
€ 2million investment, Napag Italia received a € 500,000 loan from Simest (a
loan which was fully repaid, with interest). This is not unusual – Simest is a
public company, controlled by the Italian Cassa Depositi e Presit, which is
partially owned by the Italian Ministry of Economy and Finances, and which
supports Italian companies whose activities involve foreign direct investment.
In 2018 Simest administered 800 projects for a total value of € 400million, within
a broader portfolio of over € 1billion. The support provided by Simest to
Napag’s activities was part of Simest’s broader investment operations.

Alleged links with Piero Amara
As Napag Italia developed, it retained the services of lawyer Piero Amara to
advise and assist on the contracts it was concluding, including with ENI. Mr
Amara’s firm was the only Rome-based law firm with relevant experience in the
oil and gas industry. It had previously acted for ENI and other oil and gas
companies and it made sense to instruct someone with experience in the field.
As part of the external Legal services provided by Mr Amara’s firm to Napag
Italia, junior lawyers with a Master’s degree in oil negotiation from Mr Amara’s
offices, who were assisting on technical aspects of contracts being concluded
by Napag Italia, were officially seconded to Napag Italia and therefore
corresponded using email addresses with the “@ napag.com” domain. Sending
a firm’s lawyers to a client for a time limited secondment is usual practice in the
legal sector.

Napag has historically shared office space with other companies on a standard
subletting basis. Previously, Napag shared offices in via della Fontanella Di
Borghese which it shared with two other companies.

Due its rapid growth, in February 2017 Napag Italia decided to renew its board
of directors with a view to enrolling experienced individuals who could advise
the company on its broader strategy. All members of the new board of directors
were experts, who sat on other boards and organizations, and were recruited
for their expertise. Mr Amara’s arrest, and the searches of his offices which
followed his arrest, are unrelated to Napag Italia, and to the subsequent
changes in Napag’s board of directors. As established above, Mr Amara was
only ever an external lawyer instructed by Napag Italia. He never had any role
in corporate matters and had ceased to be retained before Napag was even
incorporated.

The
Hdpe transaction Napag Italia started to conduct larger deals, involving larger sums of money. It
is in this context that it acquired Hdpe in April 2018, with a view to reselling this
product to ENI. At that point in time Napag Italia was the principal owner of the
cargo and resold it, as is usual practice in the oil industry. However, ENI later
decided to rescind the contract. The parties engaged in discussions to agree
on the terms for rescinding the contract. There was no legal dispute and the
parties quickly reached agreement on the terms of the settlement. Both parties
made a profit from the transaction because of an increase in the market price
for Hdpe. Napag did not owe any money to ENI and ENI did not pay any
monies to Napag for third parties.

The Virgin Naphta deal
The allegations made in the article published in Il Fatto Quotidiano on 9
November 2019 in relation to this deal are rejected in their entirety. After
Napag acquired the cargo, it took ownership upon the cargo’s arrival at the port
after the required checks of the relevant documentation and the quality of the
cargo were carried out by customs and the port authorities.

The transaction was concluded more than 12 months ago, and Napag has
never received any complaint or claim of any nature, whether in relation to this
deal generally, or to the Virgin Naphta cargo specifically.

The White Moon oil cargo
In the first half of 2019, Napag Trading was the principal party in the sale of an
oil cargo on a “Free On Board” basis in Iraq. This cargo was then carried by the
vessel “White Moon”, which had been chartered by ENI and for which ENI was
the ultimate buyer. The cargo was sold by Iraqi State oil company Somo to a
third party, who sold it to Napag. In turn, Napag sold the cargo to Nigerian
energy company Oando, which in turn resold it to ENI.

Upon arriving in Italy, the analyzes carried out on the cargo revealed that the
oil had a lower sulfur percentage content, even though ENI had already
tested the cargo at loading port and accepted as per contract. ENI rejected the
cargo because of issues relating to the cargo’s quality. The cargo was sold
back to Oando, and then to Napag, who resold it to the supplier, resulting in a
substantial financial loss. Somo denied that the oil cargo originated from them.
Upon investigating the position, it transpired that the transponders of the ENIchartered ship “White Moon” had been turned off for a period of time,
preventing the ship’s routes from being traceable. The logical implication is that
during the period of time for which the ship was not traceable, the cargo was
substituted for a different cargo.

Napag and Mr Mazzagatti vehemently deny any wrongdoing in this matter.
Napag has never tampered with any oil cargo. It complied with all relevant
applicable rules when effecting its role in these transactions. The analyzes
carried out by ENI and Oando have not established the origin of the oil as
being Iranian, and despite Somo’s protestations to the contrary, email
correspondence sent by Somo certifies that the cargo was theirs (therefore
certifying that it was of Iraqi origin). These emails were also sent to ENI and
Oando. We are instructed that ENI itself has given the operators written assurances that the cargo had not originated from a sanctioned country. The comments about the origin of the oil are purely speculative, and in the event
that those speculations are correct, neither Napag nor Mr Mazzagatti had no
role in any wrongdoing in relation to this matter. They consider that the reason
for which ENI refused the cargo is unrelated to the quality of the oil, and is
instead linked to ENI’s “internal wars” (as referred to in the second L’Espresso
article) and the dispute between ENI’s management and Mr Amara.
Napag has taken legal advice with regards to this transaction, and has been
assured that it has not breached any of the relevant legislation. OFAC has not
taken any steps to investigate this matter.

The prosecutors ‘investigations
Napag has submitted requests to the public prosecutors’ offices in Rome, Milan
and Messina to find out which investigations are currently ongoing against the
company. It results from this that there is only one ongoing investigation into
Napag’s activities, contrary to what is falsely alleged in the articles. This
investigation is being carried out by the Milan office (following a transfer of the
investigation from the Rome office, where it originated) and relates to Mr
Mazzagatti’s involvement in the Hdpe deal, as addressed above.

For further information, please contact Nigel Tait (nigel.tait@carter-ruck.com).