The mortgage dispute between Normal Hydrocarbons Restricted (GHL) and First Bank of Nigeria Restricted (FBN) has escalated right into a court docket battle following GHL’s request for a recent $53 million facility to finance the event of Oil Mining Lease (OML) 120.
That is in accordance with info gleaned from a leaked letter purportedly signed by Nduka Obaigbena in addition to court docket paperwork seen by Nairametrics.
The disagreement has triggered allegations, lawsuits, and freezing orders, deepening tensions between each events.
Sources near the matter knowledgeable Nairametrics that officers at First Bank have refused to honor the brand new mortgage request, citing issues over GHL’s utilization of earlier loans disbursed for a similar venture.
This refusal, coupled with rising distrust, culminated in a Mareva injunction court docket ruling that quickly froze GHL’s property throughout a number of monetary establishments in favor of FBN’s excellent debt claims.
Background
In response to the leaked letter addressed to the Central Bank Governor (CBN), Yemi Cardoso, the battle stems from an settlement between FBN and GHL initiated in the course of the tenure of Oba Otudeko, the previous Chairman of FBN Holdings Plc.
- In 2020, GHL entered right into a partnership with FBN to develop OML 120 after FBN confronted monetary publicity from non-performing loans (NPLs) linked to Atlantic Vitality.
- Data contained within the letter additional reveals the partnership was designed to “revive” FBN’s books, with income from OML 120 shared to offset the NPLs.
- The letter additionally claimed that the financing association “helped” FBN “keep away from” declaring a large N302 billion mortgage loss provision in 2021.
- Nevertheless, GHL now accuses FBN of reneging on its obligations, together with delays in disbursements that led to vital monetary and operational setbacks.
The agency claims that FBN declined to carry out its obligations below the MOU and the Excellent Publicity Tripartite Deed, contributing to GHL’s lack of the Blackford Dolphin drill ship for which GHL is at present dealing with claims exceeding $100 million in arbitration.
The push for recent loans
The present controversy revolves round GHL’s software for a $53 million mortgage on twenty eighth August 2024, to proceed its drilling and improvement actions.
- Whereas the power was initially pre-approved, sources reveal that FBN declined to disburse the funds, citing points with how GHL utilized earlier loans.
- The bank additionally expressed reservations about additional funding, insisting on structural modifications in GHL’s administration.
- Nairametrics additionally notes that the timing of the mortgage request coincided with a slew of board and administration modifications in First Bank and its guardian firm, FBN Holdings because the bank applied a number of company restructurings and repositioning forward of its recapitalization plans.
A number of sources who spoke to Nairametrics counsel the timing is critical, including {that a} change within the danger administration framework of the bank might have contributed to the decline of the recent facility demand of GHL.
Mediation efforts
Nairametrics discovered that mediators concerned in resolving the dispute proposed a big overhaul in GHL’s management, together with appointing new Chief Govt Officers (CEOs) and Chief Monetary Officers (CFOs).
- Nevertheless, each events have but to agree on these phrases, additional complicating the decision course of.
- Along with the managerial restructuring, FBN allegedly proposed the appointment of an Impartial Asset Supervisor below a brand new Framework Settlement.
- GHL objected, describing the transfer as an try by FBN to take management of its property, together with OML 120, and exchange GHL’s administration crew and operations.
Authorized Battle
The disagreement has now spilled into the courts.
- On thirtieth December 2024, the Federal Excessive Courtroom in Lagos issued a Mareva injunction, freezing GHL’s property linked to the $225.8 million mortgage owed to FBN.
- The court docket order comes amid arbitration proceedings initiated by GHL in opposition to FBN’s alleged breach of their agreements.
- GHL’s legal professionals argue that the injunction was obtained unlawfully, vowing to problem its enforcement in court docket.
- GHL’s legal professionals additionally argue {that a} subsisting court docket judgement restrains FBN from taking any step in opposition to its OML operations and mortgage requests.
In the meantime, the authorized tussle continues to delay important oil exploration and improvement actions below OML 120.
Associated improvement
In a separate however doubtless associated improvement, ThisDay Newspaper, owned by Nduka Obaigbena, Chairman of Normal Hydrocarbons Restricted (GHL), reported on its entrance web page that some minority shareholders are purportedly demanding an Extraordinary Normal Assembly (EGM) to oust FBN Chairman Femi Otedola and Julius B. Omodayo-Owotuga, a Non-executive/Deputy Chief Govt of Geregu Energy Plc.
- The connection between Obaigbena, who’s deeply concerned within the GHL-FBN dispute, and Otedola, who chairs FBN Holding, has added an intriguing dimension to this unfolding drama.
- Responding to those studies, First Bank issued an announcement affirming that it’s taking all mandatory steps to safeguard the pursuits of the corporate and its subsidiaries.
- In an announcement obtained by Nairametrics on Thursday, FBN Holdings reassured stakeholders that the continuing shareholder issues don’t impression the group’s operations.
“This matter doesn’t in any means impression the operations of the Firm, and all the companies inside the Group proceed to offer uninterrupted providers to its clients,” the assertion learn.
Sources inside the bank counsel that these associated developments could also be a part of a broader technique to stress the bank into conceding to the calls for.
Regulators hold mum
Because the dispute between Normal Hydrocarbons Restricted (GHL) and First Bank of Nigeria Restricted (FBN) intensifies, regulators have remained silent on the matter.
- Regardless of the excessive stakes and potential systemic dangers to the banking sector, neither the Central Bank of Nigeria (CBN) nor the Asset Administration Company of Nigeria (AMCON) has issued a public assertion addressing the continuing controversy.
- Sources near the state of affairs, nonetheless, inform Nairametrics that stakeholders are actively mediating to resolve the deadlock.
- Efforts are reportedly targeted on stopping any fallout that would destabilize the banking sector, given the numerous sums concerned and the potential impression on FBN’s monetary stability.
Nigerians lament on Social media
In the meantime, social media is awash with discussions in regards to the Mareva injunction and a leaked letter from GHL to the CBN.
- The revelations have sparked widespread debate on the character of monetary transactions that occurred in the course of the tenure of former CBN Governor Godwin Emefiele.
- Many on-line commentators have advised that primary company governance and danger administration processes had been ignored in issuing the loans that led to this disaster.
Critics argue that the state of affairs factors to deeper systemic points inside Nigeria’s monetary system, with potential lapses in oversight and accountability by monetary establishments and regulators alike.
Be First to Comment