First Bank of Nigeria Limited (FirstBank) has issued a press release addressing its ongoing legal and commercial dispute with General Hydrocarbons Limited (GHL), shedding light on its reasons for getting a court order to freeze GHL’s accounts and initiating court action.
The dispute, which has attracted significant public and media attention, revolves around credit facilities extended by FirstBank to GHL for the development of Oil Mining Lease (OML) assets.
In the statement, FirstBank provided its perspective, defending its actions as necessary to safeguard its interests and accusing GHL of contractual breaches.
In its statement, FirstBank emphasized that it had fulfilled its obligations under the loan agreements while accusing GHL of failing to adhere to agreed terms. According to FirstBank:
FirstBank alleged that GHL diverted proceeds from crude oil sales that were meant to serve as repayment for the loans. To address these breaches, the bank proposed appointing an independent operator to ensure better oversight of the financed assets. However, this suggestion was met with resistance.
The bank further claimed that GHL escalated the situation by demanding additional funding without fulfilling its prior obligations.
Accusations of Media Tactics: FirstBank also criticized what it described as a deliberate media campaign to misrepresent the facts of the dispute.
Court Action and Allegations: FirstBank clarified its legal position, stating that its substantive claim at the Federal High Court is distinct from the arbitration initiated by GHL.
The bank justified its court action as necessary to protect its interests in light of GHL’s alleged breaches:
The FirstBank-GHL dispute highlights the broader concerns about the state of governance and risk management in Nigeria’s financial system.
Download the FirstBank Press Release on GHC Loan and Account Freeze