₦airaland Forum

Our attention has been drawn to recent media reports regarding a commercial transaction between First Bank of Nigeria Limited (FirstBank) and General Hydrocarbons Limited (GHL) that is currently a subject of litigation.

As a responsible and law-abiding corporate citizen of Nigeria with utmost respect for the courts, FirstBank will not be able to offer comments on issues which are pending for determination by the courts, as such issues are sub-judice.

However, we are constrained to issue the following clarifications to correct the sponsored but false narratives on the matter presented in some of the media publications.

● There is a subsisting commercial transaction between FirstBank as lender, and GHL as borrower, where FirstBank extended several credit facilities to GHL for the development of some Oil Mining Lease assets.
These facilities are 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.


● While FirstBank has diligently performed its obligations under the loan agreements, at the root of the present dispute is FirstBank’s demand for good governance and transparency in the transaction, which GHL rejected.

● Upon FirstBank’s realization of breaches on the part of GHL 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 financed 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.

● GHL issued a notice to initiate arbitration and has no substantive claim pending at the Federal High Court. GHL approached the Federal High Court solely to seek preservative orders pending arbitration. Some of the preservative orders sought by GHL were granted while others were denied.
FirstBank is the only party that filed a substantive claim against GHL at the Federal High Court and the subject matter of FirstBank 's claim is not identical with the dispute GHL submitted to arbitration because FirstBank's claim is 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.

● Consequently, it is incorrect to assert that FirstBank abused the process of the court.
GHL off-took crude from the Floating Production Storage and Offloading (FPSO) vessel and diverted the proceeds. The Bank 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.

● FirstBank has a long and very rich history of supporting and providing for the financial needs of its customers over its more than 130 years of unbroken existence. FirstBank remains committed to ensuring that it continues to support legitimate business aspirations of its teeming customers. At the same time, FirstBank is 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.

● We wish to assure FirstBank’s numerous customers, stakeholders and the general public that FirstBank 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.

FirstBank also wishes to respectfully thank our shareholders for the indicatively over subscribed Rights Issue of its parent Company, First Holdco Plc ("FirstHoldco" ), in the first round of its capital raise and looks forward to an equally successful final leg of the recapitalization exercise when it is announced by FirstHoldco.

Thank you.

#YouFirst

Melagros:
COMRADES, honestly, I will reserve my comment since the matter is before the court, I will neither fault FBN nor will I fault GHL in this case. If GHL truly defaulted the loan facility, the company wouldn't have approached the court for a redress
I remember what had happened between GTB and Innoson Motors, when GTB released her own side of the story, we all blamed Innoson, but funnily, we got disappointed when the court finally delivered her judgement on the matter . Innoson Motors won the case, and I think, the court fined GTB and also compensated Innoson
It's too early to jump into conclusions

OkayDaddy:
What did Nduka use that money to do?

Melagros:
COMRADES, honestly, I will reserve my comment since the matter is before the court, I will neither fault FBN nor will I fault GHL in this case. If GHL truly defaulted the loan facility, the company wouldn't have approached the court for a redress
I remember what had happened between GTB and Innoson Motors, when GTB released her own side of the story, we all blamed Innoson, but funnily, we got disappointed when the court finally delivered her judgement on the matter . Innoson Motors won the case, and I think, the court fined GTB and also compensated Innoson
It's too early to jump into conclusions

emkz:
What has been established?

1. That General Hydrocarbons Limited (GHL) took out a loan facility that it refused to service and instead requested for more loans.

2. That the loan was diverted by the beneficiary.

3. First Bank proposed an independent operator agreed by both parties manages the financed asset when the bank realized breaches on the part of GHL. GHL rejected the idea.

We have the following questions for First Bank:

(1) On what basis was such a huge credit facility granted to GHL? This is considering that the said person with principal interest in GHL in the dispute does not have expertise in hydrocarbon exploration? Does he have any history in such projects?

(2) What due diligence was carried out before the loan was approved? In this sense, we'd like to know those running the company. Could the bank publish this information?

(3) Oil exploration is extremely expensive and a risky venture. Considering the exposure of banks to bad loans in the past due to cases of unserviced loans by some indigenous oil companies, what wisdom informed the bank to expose itself to such toxic credit asset?

(4) The debtor in question has been said to have a questionable credit history, the bank needs to explain to us the process of the loan approval and whether the loan was properly collaterized.

(5) Where exactly were the funds diverted to? The public would like to know.

(6) These are depositors' funds. What guarantee does the bank have for customers that their funds are not mismanaged?

(7) We saw a statement from the chairman of the holding company who said the asset the bank financed was secured by the debtor in questionable circumstances, i.e., without competitive bidding. At what point did this information come to light? If it was before the facility was granted, it then means the bank committed depositors' funds towards a shady asset. Was there proper corporate governance and due diligence?

For the debtor, we also have questions:

(1) What led to your inability to service the loan? They said you diverted the loan. What did you divert it to?

(2) If you could not honour previous obligations, why did you request for more?

(3) On the 1st of January 2025, President Tinubu, who was consistently opposed and mocked by your related businesses received "Man of the Year" award. Only yesterday, reports emerged that Wike was named "Minister of the Year" by your outfits. In order not to take Nigerians for granted, we are curious as to the sudden volte-face regarding these two individuals by your media businesses. Could you explain the motivation for these awards? Are the awardees expected to twist the law? How?

(4) There has been a lot of stories in the media targeted at some individuals who seem to want to recover the loan. There are stories discrediting the Chairman of First Holdco and seemingly planted stories calling for his head by unknown shareholders. Why can't the debtor explain to us properly why he couldn't service the loan?

(5) Can the debtor confirm if he owns shares in any First Bank subsidiary? If yes, does it mean that shareholders abuse their positions to secure uncollaterized loans?

(6) Why always you?

To CBN, why are you quiet?

ednut1:
There is no Nigerian billionaire that doesn’t divert bank loans. Remember when ben murray bruce diverted the 10 billion naira loan from union bank. Na their way o

emkz:
What has been established?

1. That General Hydrocarbons Limited (GHL) took out a loan facility that it refused to service and instead requested for more loans.

2. That the loan was diverted by the beneficiary.

3. First Bank proposed an independent operator agreed by both parties manages the financed asset when the bank realized breaches on the part of GHL. GHL rejected the idea.

We have the following questions for First Bank:

(1) On what basis was such a huge credit facility granted to GHL? This is considering that the said person with principal interest in GHL in the dispute does not have expertise in hydrocarbon exploration? Does he have any history in such projects?

(2) What due diligence was carried out before the loan was approved? In this sense, we'd like to know those running the company. Could the bank publish this information?

(3) Oil exploration is extremely expensive and a risky venture. Considering the exposure of banks to bad loans in the past due to cases of unserviced loans by some indigenous oil companies, what wisdom informed the bank to expose itself to such toxic credit asset?

(4) The debtor in question has been said to have a questionable credit history, the bank needs to explain to us the process of the loan approval and whether the loan was properly collaterized.

(5) Where exactly were the funds diverted to? The public would like to know.

(6) These are depositors' funds. What guarantee does the bank have for customers that their funds are not mismanaged?

(7) We saw a statement from the chairman of the holding company who said the asset the bank financed was secured by the debtor in questionable circumstances, i.e., without competitive bidding. At what point did this information come to light? If it was before the facility was granted, it then means the bank committed depositors' funds towards a shady asset. Was there proper corporate governance and due diligence?

For the debtor, we also have questions:

(1) What led to your inability to service the loan? They said you diverted the loan. What did you divert it to?

(2) If you could not honour previous obligations, why did you request for more?

(3) On the 1st of January 2025, President Tinubu, who was consistently opposed and mocked by your related businesses received "Man of the Year" award. Only yesterday, reports emerged that Wike was named "Minister of the Year" by your outfits. In order not to take Nigerians for granted, we are curious as to the sudden volte-face regarding these two individuals by your media businesses. Could you explain the motivation for these awards? Are the awardees expected to twist the law? How?

(4) There has been a lot of stories in the media targeted at some individuals who seem to want to recover the loan. There are stories discrediting the Chairman of First Holdco and seemingly planted stories calling for his head by unknown shareholders. Why can't the debtor explain to us properly why he couldn't service the loan?

(5) Can the debtor confirm if he owns shares in any First Bank subsidiary? If yes, does it mean that shareholders abuse their positions to secure uncollaterized loans?

(6) Why always you?

To CBN, why are you quiet?

OkayDaddy:
Innoson didn't get a penny from GTB. Go to Nnewi and ask him.

ppogba:
I do have so. much respect for your views on topics here on Nairaland but on this particular one, there are questions you asked here that are disappointing.

.

Ojuntana:
Who are you in the scheme of things

emkz:
What has been established?

1. That General Hydrocarbons Limited (GHL) took out a loan facility that it refused to service and instead requested for more loans.

2. That the loan was diverted by the beneficiary.

3. First Bank proposed an independent operator agreed by both parties manages the financed asset when the bank realized breaches on the part of GHL. GHL rejected the idea.

We have the following questions for First Bank:

(1) On what basis was such a huge credit facility granted to GHL? This is considering that the said person with principal interest in GHL in the dispute does not have expertise in hydrocarbon exploration? Does he have any history in such projects?

(2) What due diligence was carried out before the loan was approved? In this sense, we'd like to know those running the company. Could the bank publish this information?

(3) Oil exploration is extremely expensive and a risky venture. Considering the exposure of banks to bad loans in the past due to cases of unserviced loans by some indigenous oil companies, what wisdom informed the bank to expose itself to such toxic credit asset?

(4) The debtor in question has been said to have a questionable credit history, the bank needs to explain to us the process of the loan approval and whether the loan was properly collaterized.

(5) Where exactly were the funds diverted to? The public would like to know.

(6) These are depositors' funds. What guarantee does the bank have for customers that their funds are not mismanaged?

(7) We saw a statement from the chairman of the holding company who said the asset the bank financed was secured by the debtor in questionable circumstances, i.e., without competitive bidding. At what point did this information come to light? If it was before the facility was granted, it then means the bank committed depositors' funds towards a shady asset. Was there proper corporate governance and due diligence?

For the debtor, we also have questions:

(1) What led to your inability to service the loan? They said you diverted the loan. What did you divert it to?

(2) If you could not honour previous obligations, why did you request for more?

(3) On the 1st of January 2025, President Tinubu, who was consistently opposed and mocked by your related businesses received "Man of the Year" award. Only yesterday, reports emerged that Wike was named "Minister of the Year" by your outfits. In order not to take Nigerians for granted, we are curious as to the sudden volte-face regarding these two individuals by your media businesses. Could you explain the motivation for these awards? Are the awardees expected to twist the law? How?

(4) There has been a lot of stories in the media targeted at some individuals who seem to want to recover the loan. There are stories discrediting the Chairman of First Holdco and seemingly planted stories calling for his head by unknown shareholders. Why can't the debtor explain to us properly why he couldn't service the loan?

(5) Can the debtor confirm if he owns shares in any First Bank subsidiary? If yes, does it mean that shareholders abuse their positions to secure uncollaterized loans?

(6) Why always you?

To CBN, why are you quiet?

emkz:
(6) Why always you?

To CBN, why are you quiet?

potent5:
What is your interest in the matter? You seem to be out to do a hatchet job.

potent5:
What is your interest in the matter? You seem to be out to do a hatchet job.

3seriez:
Ote$dola is calling the shots now. No more padi padi arrangement. Pay you due or be ready for trouble.
First bank though have a history of granting loans to shady so called big men who collect big loans and don't pay back. I remember even Jimoh Ibrahim was owing them like over 40 bill during Jonathan's time.