KEY POINTS
- As litigation continues, FirstBank clarifies details of its transactions with GHL
- The dispute revolves around allegations of breached agreements and diverted proceeds.
- We want to strengthen the transparency, the financial integrity, customer support and reassure them that we remain in commitment.
In respect of media reports indicating FirstBank’s commercial relationship with General Hydrocarbons Limited (GHL), the matter being litigated, First Bank of Nigeria Limited, therefore, states as follows: The bank said it would always respect judicial processes and refrain from commenting on subjudice matters. But it explained itself against inaccurate public narratives.
The transaction details
FirstBank said the dispute was over a series of credit facilities given to GHL to develop the Oil Mining Lesson assets.
The parties signed the agreements after parties entered into robust contracts that spelt out the duties and responsibilities of both sides, with a clearly defined security measure.
GHL breached the agreement of the bank by diverting proceeds from the financed assets, the bank alleged. First Bank responded by suggesting that it appoint an independent operator, to which both parties would mutually agree, to bring in transparency and safeguarding the stakeholder interests.
GHL rejected the request before GHL requested more funding without fulfilling the stipulated conditions of the bank.
Coverage scope and legal proceedings
GHL clarified the ongoing litigation is unrelated to the arbitration that the GHL had initiated. The court claim of the bank pertains to credit agreements which don’t fall within the ambit of arbitration by virtue of clauses in subsequent finance agreements.
GHL filed a court application seeking preservative orders in regard to arbitration pending; the bank said the court granted a few but dismissed others. First Bank stands by the decision to head to the courts saying it was necessary to protect assets, recover diverted proceeds and protect its interests as a secured lender.
Financial integrity commitment
FirstBank also re-emphasized its long standing history of supporting businesses and stimulating financial growth going by the 130 years it has been into business.
It stressed it was a credit culture that would maintain a strong credit culture where borrowers pay back their debts.
It also pacified customers, stakeholders and shareholders of their bank’s safety and dedication to first class service. The company said it highlighted the success of the first phase of FirstHoldco’s parent company recapitalization exercise and is confident in the next stage.
