By Ayomide Otitoju
First Bank of Nigeria Limited (FirstBank) has issued a statement to clarify misleading media reports surrounding its commercial transaction with General Hydrocarbons Limited (GHL), which is currently under litigation. The bank reaffirmed its commitment to due process and reiterated its dedication to providing gold-standard banking services.
FirstBank explained that it would not comment on details of the case as it remains sub judice. However, it provided clarifications to counter inaccuracies in certain reports.
Background of the Dispute
The dispute stems from a commercial transaction in which FirstBank, as the lender, extended credit facilities to GHL, the borrower, for developing Oil Mining Lease assets. The agreements were underpinned by robust terms, including clearly defined obligations and security arrangements.
FirstBank stated that it has upheld its obligations under the agreements. However, issues arose when GHL allegedly breached the terms by diverting proceeds from the financed assets. In response, FirstBank requested the appointment of an independent operator to ensure transparency, protect stakeholder interests, and optimize project value. GHL rejected this request and demanded additional funding, which FirstBank declined due to the breaches.
Legal Developments
FirstBank clarified that GHL initiated arbitration proceedings and sought preservative orders from the Federal High Court, some of which were granted. However, the bank emphasized that its substantive claim, filed at the Federal High Court, pertains to subsequent credit facilities and is distinct from the arbitration proceedings.
The bank also denied accusations of abusing court processes, stating that its legal actions aim to recover diverted funds, preserve assets, and prevent further breaches.
Commitment to Customers and Stakeholders
FirstBank reassured its customers, stakeholders, and the public of its unwavering commitment to supporting legitimate business aspirations while fostering a strong credit culture. The bank emphasized its 130-year legacy of financial excellence and its resolve to uphold contractual obligations.
Additionally, FirstBank thanked its shareholders for the oversubscription of the Rights Issue by its parent company, First Holdco Plc, and expressed optimism for the next phase of the recapitalization process.
Conclusion
FirstBank remains steadfast in its mission to deliver exceptional banking services and protect the interests of its customers and stakeholders. The bank expressed confidence in the judicial system to resolve the matter fairly and uphold contractual integrity.
