In a move to clarify its position amid rising public interest, FirstBank of Nigeria Limited has issued an extensive press release explaining the reasons behind its decision to freeze General Hydrocarbons Limited’s (GHL) accounts and initiate legal proceedings. This action stems from a high-stakes financial dispute tied to credit facilities provided for the development of Oil Mining Lease (OML) assets.
The Backstory: A Crumbling Partnership
The friction between FirstBank and GHL began after the latter requested an additional $53 million to advance its OML 120 project. FirstBank, citing mismanagement of prior loans, denied the request. The situation escalated, with GHL initiating arbitration and securing a court injunction to freeze $225 million in assets. In retaliation, FirstBank filed a substantive claim, accusing GHL of breaching loan agreements and diverting funds meant for loan repayment.
FirstBank’s Position: Governance and Accountability at Stake
In its press release, FirstBank firmly stated that it had met all its obligations under the agreements while highlighting GHL’s alleged violations. The bank expressed concerns over governance and transparency, emphasizing its demands for accountability in managing the financed assets.
“FirstBank has diligently performed its obligations under the robust loan agreements executed with GHL,” the statement read. “At the root of this dispute is FirstBank’s demand for good governance and transparency. Unfortunately, these were rejected by GHL.”
The bank accused GHL of diverting proceeds from crude oil sales that were meant for loan repayment and obstructing efforts to appoint an independent operator for project oversight.
Legal Action and Media Scrutiny
The conflict has spilled into the courts, with both parties lodging claims. While GHL sought a preservative order through arbitration, FirstBank pursued a substantive claim in the Federal High Court, seeking remedies for alleged breaches.
Amid the legal battle, FirstBank criticized what it described as a “deliberate media campaign” aimed at misrepresenting the facts. “We are compelled to address false narratives being propagated in certain media outlets. These narratives are misleading and fail to capture the essence of the dispute,” the bank stated.
What This Means for Financial Governance in Nigeria
This dispute underscores the complexities of managing high-value loans and highlights the critical role of transparency and risk management in Nigeria’s financial system. For FirstBank, the legal battle is about more than recovering funds—it is a fight to preserve its reputation as a responsible lender.
As the case unfolds, its outcome may set a precedent for similar disputes, shaping the dynamics of governance, risk management, and accountability in Nigeria’s oil and gas financing sector.
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