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First Bank Nigeria Plc has thrown more light on its business transaction with General Hydrocarbons Limited (GHL), accusing the company of breach of agreement, non-adherence to good governance, proceeds diversion and non-payment of due obligation.
Reacting to Hydrocarbons’ denial of indebtedness to it, First Bank said that at the root of the dispute is its demand for good governance and transparency in the transaction with Hydrocarbons.
The bank said that it would have avoided joining issues with Hydrocarbons but constrained to issue clarifications to correct the false narratives on the matter in the press.
First Bank said that there is a subsisting commercial transaction between it, “as lender and GHL as borrower, where FirstBank extended several credit facilities to GHL for the development of some Oil Mining Lease assets.”
According to it, the facilities were “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.”
The bank said that after realising breaches by Hydrocarbons, “including diversion of proceeds, FirstBank requested that an independent operator mutually acceptable to both parties be appointed in line with the terms of the agreement, to operate the financial asset in a transparent manner that will bring greater visibility to the project, protect the interest of, and bring value to all stakeholders.
“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.”
First Bank accused Hydrocarbons of issuing a notice to initiate arbitration as well as approaching the Federal High Court “solely to seek preservation orders pending arbitration” instead of addressing the issues raised.
The bank revealed that it filed a substantive claim against GHL at the Federal High Court “in respect of subsequent credit facilities granted to GHL and the offer letters and finance documents pertaining to the subsequent transactions clearly state that the disputes arising from the subsequent facilities are to be resolved by a court of competent jurisdiction in Nigeria and not by arbitration.”
First Bank accused GHL of off-taking crude from the Floating Production Storge and Offloading (FPSO) vessels and diverted the proceeds, stating that it 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. It is clear to us that the courts do not support or protect illegalities and breaches of contracts.”
It stated its commitment to support legitimate business aspirations and committed to the “building of a strong credit culture where borrowers pay their debts when they borrow and will always take appropriate steps, within the ambit of the law, to resist attempts by borrowers to repudiate their repayment obligations.”
The bank assured its customers, stakeholders and the general public to remains solid, calm, steadfast and unflinching in its resolve to continue to provide first-class services to its teeming customers within and outside the country.
