Toba Owojaiye reporting
Abuja, Nigeria
First Bank of Nigeria Limited (FirstBank) has addressed its ongoing legal conflict with General Hydrocarbons Limited (GHL), explaining its decision to freeze GHL’s accounts and pursue legal remedies.
Truth Live News gathered that the dispute stems from loans FirstBank provided to GHL for its Oil Mining Lease (OML) projects, with allegations of contractual breaches and mismanagement at the center of the conflict.
FirstBank stated it acted to protect its interests after identifying serious governance concerns in GHL’s handling of the loans. According to the bank, GHL diverted proceeds from crude oil sales that were meant to repay the loans. Efforts to improve transparency by appointing an independent operator were resisted by GHL.
“FirstBank has diligently performed its obligations under the robust loan agreements executed with GHL,” the bank noted. “However, breaches, including the diversion of proceeds from crude oil off-takes, forced us to act in the best interest of our stakeholders.”
The disagreement escalated when GHL sought additional funding of $53 million, which FirstBank refused, citing non-compliance with prior agreements. In response, GHL initiated arbitration proceedings while FirstBank pursued a substantive claim in the Federal High Court to recover funds and enforce repayment terms.
FirstBank also criticized what it described as a “media campaign” aimed at misrepresenting the facts of the dispute. The bank emphasized its commitment to transparency and fairness, stating it would not yield to external pressure.
“We are constrained to issue clarifications to counter false narratives being propagated in the media. These narratives fail to capture the true nature of the dispute,” the bank said.
This high-stakes legal battle underscores the importance of accountability and risk management in Nigeria’s financial and oil sectors. The outcome will likely set a precedent for resolving disputes involving lenders and operators in capital-intensive industries.
While FirstBank positions itself as a responsible lender safeguarding its interests, GHL’s counterclaims of delays and bad faith highlight the complexities of such cases. The final rulings in court and arbitration will determine the way forward for both parties and could influence future commercial agreements in the sector.
The legal dispute between First Bank of Nigeria Limited (FirstBank) and General Hydrocarbons Limited (GHL) involves significant financial figures. FirstBank alleges that GHL owes approximately $225.8 million, leading to a court order freezing GHL’s accounts and assets up to that amount.
GHL disputes this claim, asserting that it is not indebted to FirstBank for $225 million.
Additionally, GHL had requested a fresh $53 million loan from FirstBank to continue the development of its OML 120 project, which FirstBank refused, citing concerns over GHL’s handling of prior loans.
These conflicting positions are central to the ongoing legal proceedings between the two parties.