GHL: First bank finally reacts to claims of abusing court process in $230m loan
- FirstBank responded to the claim that it had taken advantage of the legal system made by General Hydrocarbons Limited
- The bank asserted that it was the only party to file a significant lawsuit against GHL at the Lagos Federal High Court
- This followed a court order that FirstBank secured to restrict GHL's accounts because of a purported $225 million debt
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
First Bank of Nigeria Limited (FirstBank) reacted to General Hydrocarbons Limited's (GHL) allegation that it had exploited the legal system.
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In a statement, the bank claimed to be the sole party to submit a substantial claim against GHL to the Federal High Court in Lagos.
It made it clear that its allegations and the dispute GHL filed for arbitration and sought preservation orders over are not the same.
An order blocking GHL's accounts was obtained by FirstBank due to a purported $225 million debt.
The business, however, objected to the Mareva injunction that Justice Deinde Dipeolu issued in response to an application filed by FirstBank and FBNQuest Trustees Limited.
All Nigerian banks were ordered by the court to refrain from disbursing cash to GHL, which is owned by Nduka Obaigbena, Publisher of ThisDay Newspapers and Chairman of Arise.
The accounts of GHL directors Obaigbena, Efe Damilola Obaigbena, and Olabisi Eka Obaigbena were also blocked.
In a statement released on Sunday by Abdelmuizz Bello, its Director of Strategy & Operations, GHL charged FirstBank with acquiring the Mareva injunction from a different judge "despite the existence of a subsisting court order" in its favor.
First Bank reacts
GHL's allegation of process abuse was deemed "incorrect" by FirstBank, The Nation reported.
The bank said,
“There is a subsisting commercial transaction between FirstBank as lender, and GHL as borrower, where FirstBank extended several credit facilities to GHL for the development of some oil mining lease assets.
“These facilities are backed by very robust loan agreements executed by the parties in which the obligations of the parties are clearly defined and the security arrangement clearly spelt out.
“While FirstBank has diligently performed its obligations under the loan agreements, at the root of the present dispute is FirstBank’s demand for good governance and transparency in the transaction, which GHL rejected.
Following FirstBank's discovery of GHL's violations, including the diversion of proceeds, FirstBank asked that an independent operator be chosen in accordance with the terms of the contract to manage the financed asset in a transparent way that would increase project visibility, safeguard the interests of all stakeholders, and add value.
It added,
“Not only did GHL roundly reject this reasonable and fair request, rather GHL insisted that FirstBank avails it with more funding.
“GHL refused to execute the terms of offer stipulated by the bank for the availment of additional funding but rather proceeded to commence needless Arbitral proceedings.
“GHL issued a notice to initiate arbitration and has no substantive claim pending at the Federal High Court.
“GHL approached the Federal High Court solely to seek preservative orders pending arbitration. Some of the preservative orders sought by GHL were granted while others were denied.
As a result, it declared that the claim that FirstBank misused the court's process was false.
The bank added: “GHL off-took crude from the Floating Production Storage and Offloading (FPSO) vessel and diverted the proceeds.
“The bank had no choice as a secured lender, under these circumstances of continued breaches, non-payment of due obligations and attempts to shield the bank away from agreed security and repayment sources, than to approach the court for legal remedies, to preserve assets, recover the diverted proceeds, prevent reoccurrences and safeguard FirstBank’s interest.
Femi Otedola Breaks Silence on Alleged $230m Loan
Legit.ng reported that Femi Otedola, the Chairman of FBN Holdings, the parent company of First Bank, has reiterated his dedication to the financial institution.
In a message reacting to the ongoing heated dispute with Nduka Obaigbena, the Chairman and Publisher of ThisDay and Arise News Channel, Otedola said he is determined to preserve the integrity of First Bank of Nigeria.
The disagreement between Otedola and Nduka, seemingly resulting in a media war, centres on allegations surrounding a $230 million loan, reportedly secured by GHL, the owners and operators of OML 120, a deep offshore oil block in Nigeria.
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Source: Legit.ng
