First Bank of Nigeria Limited (FirstBank) has responded to recent media reports regarding an ongoing legal dispute with General Hydrocarbons Limited (GHL). The bank clarified its position, emphasizing that while the matter is sub-judice, it is committed to transparency and good governance in all its dealings.
In a statement issued by its Management, the bank explained that there is a commercial transaction between it and GHL, with FirstBank acting as a lender and GHL as a borrower. The transaction involves several credit facilities provided to GHL for the development of Oil Mining Lease assets. The bank stressed that these facilities are underpinned by solid loan agreements with clearly defined obligations and security arrangements.
However, the dispute stems from FirstBank’s demand for good governance and transparency, which GHL reportedly rejected. According to FirstBank, the bank discovered breaches on the part of GHL, including the diversion of proceeds, prompting a request for an independent operator to be appointed for the project. GHL refused the bank’s request and instead insisted on receiving more funding, while also rejecting the terms required to access additional funds.
Litigation Details:
GHL had initiated arbitration proceedings, though the matter at the Federal High Court revolves around claims related to subsequent credit facilities granted to GHL. FirstBank clarified that the disputes arising from these subsequent facilities were clearly outlined in the loan documents, specifying that such disputes should be resolved in court, not through arbitration.
FirstBank also emphasized that it is the only party that filed a substantive claim in the Federal High Court. The bank’s claim concerns the recovery of diverted proceeds and protection of its interests as a secured lender. FirstBank further stated that it had no alternative but to approach the court due to breaches by GHL, including non-payment of due obligations and attempts to shield assets.
FirstBank’s Position:
FirstBank expressed its commitment to upholding the rule of law, ensuring legitimate business operations, and fostering a culture of accountability in credit relationships. The bank reassured its customers, stakeholders, and the public that it remains solid, reliable, and committed to providing excellent services.
Furthermore, FirstBank thanked its shareholders for the successful completion of its oversubscribed Rights Issue, expressing confidence in the continued success of its recapitalization efforts.
FirstBank remains steadfast in its resolve to protect its interests and maintain a strong credit culture, assuring all stakeholders that it will continue to take the necessary legal steps to safeguard its business and uphold its financial commitments.
