Legal Showdown: Court Restrains First Bank, Otedola Faces Contempt Over Oil Deal Dispute
Breaking Down the Details:
1. The Core Dispute:
• General Hydrocarbons Limited (GHL) has accused First Bank of Nigeria (FBN) of breaching an agreement to fund the exploration and development of Oil Mining Lease (OML) 120.
• FBN allegedly failed to fulfill its financial obligations under the deal, leading to significant operational and financial losses for GHL.
2. Court Injunctions and Contempt Allegations:
• A Federal High Court in Lagos issued an order restraining FBN from enforcing any claims or seizing GHL’s assets tied to the disputed facility agreement.
• Despite this, FBN reportedly froze GHL’s funds across commercial banks to the tune of $225.8 million.
• GHL has initiated contempt proceedings against FBN’s Chairman, Femi Otedola, and other directors, alleging they flouted the court’s orders.
3. Financial Damages Claimed by GHL:
• GHL estimates losses of over $47 million due to delayed funding and operational setbacks.
• A liability of $500,000 per day was incurred during a rig standby period caused by FBN’s delayed disbursement of funds.
• GHL has announced plans to sue FBN for $1 billion in damages for breach of contract.
4. Shareholder Backlash at FBN Holdings:
• Dissatisfied shareholders, including Barbican Capital Limited and Norsworthy Investment Limited, oppose FBN’s proposed private placement of N350 billion.
• These shareholders are demanding an Extraordinary General Meeting (EGM) to discuss the removal of key directors, including Femi Otedola, and propose replacements.
5. Additional Allegations Against FBN:
• GHL accuses FBN of using their agreement to manipulate its financial position, avoiding a N302 billion loan loss provision in 2021 while declaring a profit of N151 billion.
• GHL claims FBN acted in bad faith by refusing to pay operational expenses, penalties, and other obligations tied to the OML 120 project.
6. Calls for Transparency:
• Shareholders have requested detailed explanations on the private placement exercise and insist on a rights issue to ensure equitable participation for existing shareholders.
What’s Next?
The legal battle and shareholder discontent are expected to intensify in the coming weeks as GHL pursues its $1 billion lawsuit and FBN shareholders demand accountability and transparency in the bank’s governance.
Breaking Down the Details:
1. The Core Dispute:
• General Hydrocarbons Limited (GHL) has accused First Bank of Nigeria (FBN) of breaching an agreement to fund the exploration and development of Oil Mining Lease (OML) 120.
• FBN allegedly failed to fulfill its financial obligations under the deal, leading to significant operational and financial losses for GHL.
2. Court Injunctions and Contempt Allegations:
• A Federal High Court in Lagos issued an order restraining FBN from enforcing any claims or seizing GHL’s assets tied to the disputed facility agreement.
• Despite this, FBN reportedly froze GHL’s funds across commercial banks to the tune of $225.8 million.
• GHL has initiated contempt proceedings against FBN’s Chairman, Femi Otedola, and other directors, alleging they flouted the court’s orders.
3. Financial Damages Claimed by GHL:
• GHL estimates losses of over $47 million due to delayed funding and operational setbacks.
• A liability of $500,000 per day was incurred during a rig standby period caused by FBN’s delayed disbursement of funds.
• GHL has announced plans to sue FBN for $1 billion in damages for breach of contract.
4. Shareholder Backlash at FBN Holdings:
• Dissatisfied shareholders, including Barbican Capital Limited and Norsworthy Investment Limited, oppose FBN’s proposed private placement of N350 billion.
• These shareholders are demanding an Extraordinary General Meeting (EGM) to discuss the removal of key directors, including Femi Otedola, and propose replacements.
5. Additional Allegations Against FBN:
• GHL accuses FBN of using their agreement to manipulate its financial position, avoiding a N302 billion loan loss provision in 2021 while declaring a profit of N151 billion.
• GHL claims FBN acted in bad faith by refusing to pay operational expenses, penalties, and other obligations tied to the OML 120 project.
6. Calls for Transparency:
• Shareholders have requested detailed explanations on the private placement exercise and insist on a rights issue to ensure equitable participation for existing shareholders.
What’s Next?
The legal battle and shareholder discontent are expected to intensify in the coming weeks as GHL pursues its $1 billion lawsuit and FBN shareholders demand accountability and transparency in the bank’s governance.