A Federal High Court has issued a series of orders, including Mareva injunctions, to freeze assets and accounts linked to General Hydrocarbons Limited, its affiliates, and prominent individuals, including media mogul Nduka Obaigbena.
The court’s decision follows allegations of unpaid loans totaling $225.8 million, owed to a financial institution.
This is contained in a court document seen by Nairametrics detailing the prayers of the plaintiffs, First Bank of Nigeria Ltd and FBNQuest Trustees Ltd, both subsidiaries of FBN Holdings Plc, a publicly listed financial services company in Nigeria.
General Hydrocarbons, an oil and gas company, is owned by Nduka Obaigbena, the publisher and founder of ThisDay Newspapers and Arise TV.
The company is mentioned as the operator of OML 120, an oil producing block in Nigeria.
The injunctions were granted to prevent the defendants, General Hydrocarbons Limited and other associated entities, from transferring or dissipating assets while a legal dispute over unpaid loan facilities is resolved.
The loans, reportedly issued by the plaintiffs, amount to $225,802,379.69 as of September 30, 2024.
The injunction restrains all major financial institutions in Nigeria including Guaranty Trust Bank, Access Bank, Zenith Bank, First Bank of Nigeria, and emerging digital platforms like Flutterwave, Paystack, and Piggyvest from releasing funds or dealing with any accounts associated with the defendants.
What the court documents reveal
The Federal High Court issued a series of freezing orders, known as Mareva injunctions, against General Hydrocarbons Limited, its directors, and affiliated entities, including Nduka Obaigbena, over an alleged debt of $225.8 million.
The court directed all major commercial banks and financial institutions in Nigeria to block the defendants’ accounts and restrict access to funds or assets up to the claim amount, pending further legal proceedings.
The injunctions restrain banks like GTBank, Access Bank, Zenith Bank, First Bank, and fintech platforms such as Flutterwave, Paystack, and Piggyvest from releasing funds or handling assets linked to the defendants.
This includes accounts associated with key individuals like Efe Damilola Obaigbena and Olabisi Eka Obaigbena, as well as corporate entities such as GHL 121 Ltd, CESL Oyo Production, and other companies tied to the oil block operations.
“An order of Mareva injunction restraining all commercial banks in Nigeria, including Guaranty Trust Bank Limited, Access Bank Plc, Citibank Nigeria Limited, Carbon Bank, Ecobank Nigeria Plc, Fidelity Bank Plc, First Bank of Nigeria Limited, First City Monument Bank Plc, Flutterwave, Globus Bank, Heritage Bank Limited, Jaiz Bank, Keystone Bank Limited, Opay Digital Services Limited, PalmPay Limited, Paystack Payments Limited, Piggyvest, Momo Payment Service Bank Limited, Polaris Bank Limited, Providus Bank, Stanbic IBTC Bank Nigeria Limited, Standard Chartered Bank, Sterling Bank Plc, SunTrust Bank Limited, Union Bank of Nigeria Plc, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, Zenith Bank Plc, and all other financial institutions operating in Nigeria, from releasing or dealing with any funds or assets due to the GHL up to the sum of $225,802,379.69,being the outstanding indebtedness on the GHL’s account with FirstBank as of 30 September 2024 in respect of the loan facilities granted to GHL by FirstBank pending the hearing and determination of the Motion on Notice for interlocutory injunction,” the court injunction partly reads.
The court also mandated the banks to disclose the exact balances in these accounts and provide certified statements of account within seven days.
Furthermore, it ordered companies involved in oil block OML 120 to submit records of production and revenue since operations began, with proceeds directed to the plaintiffs’ account.
In addition to freezing funds, the court issued interim injunctions preventing the defendants from transferring or dissipating assets, including crude oil stocks, insurance policies, shares, and other receivables.
This ensures that the defendants cannot deplete resources that may be used to settle the outstanding debt.
The Directors of General Hydrocarbons were also specifically restrained from disposing of their personal assets, whether movable or immovable, within Nigeria.
Why the Mareva injunction
According to Nairametrics findings, the legal action stems from loans allegedly granted to the first defendant, General Hydrocarbons, by the plaintiff’s bank.
According to the Plaintiff, the loans remain unpaid as of September 30, 2024.
The loan was reportedly secured using various assets, including crude oil stocks, insurance policies, and receivables.
These funds, which were initially intended for oil block acquisition, are claimed to have been misused for personal expenditures.
Among other accusations, the defendants are said to have diverted funds to finance luxury properties and private jet operations.
With the outstanding sum now exceeding $225 million, the plaintiffs sought court intervention to preserve assets pending the determination of the case.
What’s Next?
Sources revealed to Nairametrics that the case is ongoing, and further hearings will determine the outcome of a case that is likely to reverberate through the Nigerian financial services sector.
The outcome of this case could have far-reaching implications for corporate governance and the financial stability of the affected entities.
FBNH’s share price fell 1.27% to close at N31.05 on Thursday, January 2024.
This is a developing story, and more updates are expected as legal proceedings continue….
