A Federal High Court has issued an order to freeze the assets of General Hydrocarbons Limited, along with its affiliates and the company’s owner, media mogul Nduka Obaigbena. The court order relates to an outstanding $225.8 million loan allegedly owed to First Bank of Nigeria Limited and FBNQuest Trustees Limited.
Background of the Case
The legal action stems from loans reportedly obtained by General Hydrocarbons Limited, a Nigerian oil and gas firm, which have remained unpaid as of September 2024. The company is owned by Nduka Obaigbena, a prominent media entrepreneur behind ThisDay Newspapers and Arise TV. The borrowed funds were linked to the company’s operations within Nigeria’s oil-producing block, OML 120.
What is a Mareva Injunction?
A key element of the court’s decision is the issuance of a Mareva injunction, also known as a freezing order. This is a legal mechanism used to restrict a party from moving or disposing of assets during a legal dispute. The purpose is to prevent the depletion of funds or resources that could be used to satisfy a court judgment if the lender wins the case.
In this instance, the injunction aims to protect First Bank’s interests by preventing the transfer of assets from General Hydrocarbons or its affiliates while the debt recovery case proceeds.
Impact on the Parties Involved
The freezing of assets could have wide-reaching implications for Obaigbena’s business empire, including possible operational disruptions at General Hydrocarbons and his media enterprises. The restriction also affects the ability to access or utilize frozen funds, potentially impacting daily business functions.
From First Bank’s perspective, the injunction helps secure financial claims by ensuring the company’s assets remain available for potential recovery, should the court rule in the bank’s favor.
First Bank’s Previous Oil and Gas Loan Challenges
This legal dispute echoes earlier challenges faced by First Bank concerning non-performing loans in Nigeria’s oil and gas sector. Notably, around a decade ago, the bank encountered a similar situation involving Atlantic Energy Drilling Concepts Nigeria Limited, which defaulted on substantial loans. This development contributed to the reduction of the entity’s NPL ratio from 25.9 percent in December 2018 to 14.5 percent as of June 2019
Next Steps
As the legal process unfolds, both parties will have the opportunity to present their cases in court. The defendants may seek to have the injunctions lifted or modified, while the plaintiffs will aim to secure repayment of the outstanding loan amounts. The court will evaluate the evidence and arguments to determine the appropriate resolution of the dispute.
