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FirstBank of Nigeria Limited, a leading financial institution in Nigeria, has responded to what it described as “misleading reports” circulating in the media regarding a commercial transaction with General Hydrocarbons Limited (GHL), which is currently under litigation. The bank, while addressing these narratives, reassured its customers of its commitment to gold-standard banking services and strict adherence to corporate responsibility.
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In a press statement, FirstBank emphasized its respect for the judicial process, stating:
“As a responsible and law-abiding corporate citizen of Nigeria with utmost respect for the courts, FirstBank will not comment on issues pending determination by the courts, as such matters are sub judice. However, it is imperative to provide clarifications to address inaccuracies in some media publications.”
Clarifications on the Dispute
FirstBank outlined key facts to counter the alleged false narratives:
- Nature of the Transaction:
- FirstBank extended credit facilities to GHL for the development of Oil Mining Lease (OML) assets under a robust loan agreement detailing the obligations of both parties and specifying security arrangements.
- Governance and Transparency Issues:
- The current dispute arose from FirstBank’s demand for improved governance and transparency, which GHL rejected.
- The bank identified breaches, including the diversion of proceeds, and proposed appointing an independent operator to manage the financed asset transparently. GHL declined and instead demanded additional funding without meeting stipulated terms.
- Legal Proceedings and Arbitration:
- GHL initiated arbitration proceedings and sought preservative orders from the Federal High Court. While some orders were granted, others were denied.
- FirstBank clarified that it filed a substantive claim against GHL, distinct from the arbitration proceedings initiated by GHL, as the dispute concerns subsequent credit facilities governed by Nigerian courts rather than arbitration.
- Asset Preservation and Recovery:
- FirstBank took legal action as a secured lender to address breaches, recover diverted proceeds, and protect its interests in light of continued non-payment and attempts to shield agreed repayment sources.
- The bank stated: “The courts do not support or protect illegalities and breaches of contracts.”
Commitment to Banking Excellence
FirstBank reiterated its rich heritage of over 130 years in supporting the financial needs of Nigerians and its steadfast commitment to fostering a strong credit culture where borrowers meet their obligations.
The bank emphasized:
- Its dedication to supporting legitimate business aspirations.
- A firm stance against borrowers attempting to default on repayment agreements.
- Its ability to provide innovative, first-class banking services within Nigeria and internationally.
Oversubscribed Rights Issue and Recapitalization Plans
FirstBank also expressed gratitude to its shareholders for the indicatively oversubscribed Rights Issue of its parent company, FBN Holdings Plc (FirstHoldco), during the first round of its capital raise. The bank looks forward to a successful completion of the final leg of the recapitalization exercise, expected to enhance its operational capacity and competitiveness.
Reassurance to Customers and Stakeholders
Amid the ongoing litigation, FirstBank assured its customers, stakeholders, and the public of its:
- Financial stability: A solid foundation to support its operations.
- Operational excellence: Continuous provision of premium banking services.
- Transparency: A commitment to ethical business practices and legal compliance.
“FirstBank remains solid, calm, and unflinching in its resolve to deliver exceptional services and maintain its position as a leader in the Nigerian banking industry,” the statement concluded.
