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Nigerian banks are expected to maintain the current court restrictions on access to General Hydrocarbons Limited (GHL) accounts, pending the determination of Court Appeals in the First Bank vs. GHL case.
Recent media reports had suggested that some banks have begun complying with the ruling of Honourable Justice Deinde Dipeolu of the Federal High Court, Lagos which lifted the Mareva order placed on the assets of General Hydrocarbons Limited (GHL), its directors, and shareholders.
“We would like to state that such action is premature, as the necessary steps for banks and stakeholders to comply with the court’s decision have not yet been completed,” First Bank said in a statement over the weekend.
Notwithstanding the above, FirstBank has also appealed against the discharge of the Mareva order and applied for an injunction and / or suspension of the discharge order pending the determination of the Appeal.
“In view of the pending Appeal and Motion for Injunction, banks are expected to maintain the status quo,” First Bank said.
FirstBank said it remains committed to protecting the interests of its shareholders, depositors, and stakeholders.
The legal case against GHL
First Bank says it will continue to pursue all available legal avenues to recover unserviced debts from debtors, ensuring that those who have defaulted on their obligations are held accountable.
“We wish to seize this medium to assure all our valued stakeholders that FirstBank remains strong, stable and fully committed to resolving this issue in line with the provisions of the law. We are actively addressing all matters at hand with transparency and diligence, while remaining focused,” the bank said.
First Bank is pursuing a claim of the total sum of US$225,802,379.69 (Two Hundred and Twenty-Five Million Eight Hundred and Two Thousand, Three Hundred and Seventy-Nine Dollars and Sixty-Nine Cents) being the indebtedness on GHL’s account with it as of 30th September 2024, in respect of the loan facilities granted.
The bank explained in its filing to the Court that GHL and its Directors were diverting funds and dissipating assets outside the jurisdiction of the Court. The Bank then provided Bill of Loading Exhibits showing the shipment of 128,724 US barrels and 114,359 US barrels of crude oil from the FPSO to France just in November, 2024.
According to First Bank:
“The facts leading to the institution of the suit by FirstBank arise from the terms of the Facility Agreement which makes the entire loan facilities due for repayment if :
- GHL fails to pay back its loans as and when due
- The triggering of a second event of default which is the change in the ownership structure of GHL without obtaining the permission of First Bank
- Diversion of the proceeds of the loan by GHL and its Directors.”
First Bank protects customer interests by pursuing lawsuit
It is important to note that FirstBank of Nigeria’s legal battle with General Hydrocarbons Limited (GHL) is in the interest of its shareholders, investors, and the Nigerian economy as a whole.
This is because the lender has an obligation to protect customers’ deposits as it has a client base in West Africa of over 42 million customers.
Of course, these loans were extended to GHL on the expectations that the assets “Oil Mining Lease 120” would generate reasonable income enough to pay interest on the monies collected from the financial institution plus the principal.
First Bank disclosed real urgency in the lawsuit stating: “the imminent diversion of crude from the financed asset scheduled between the end of December and early January.”
First Bank has stated that the lawsuit against GHL also relates to the stability of the Nigerian banking system, and is an issue of national interest which could negatively impact the public who are depositors and shareholders of the bank.
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