N1.6b Debt Case: Bank Asks Court to Freeze Oil Firm’s Assets

Nova Merchant Bank Limited has asked a Federal High Court in Lagos to place a lien on the assets of Midwestern Oil and Gas Company Limited with the Central Securities Clearing System (CSCS) and the funds in its accounts with 25 banks following its failure to liquidate an alleged N1,648, 649,286.68 debt.

The bank made the prayer in its January 9 motion on notice fiked by its lawyer, Kemi Balogun SAN, in suit FHC/L/CP/2641/2023 filed on December 19, 2023.

Nova Merchant Bank is the sole plaintiff in the winding up proceedings against the respondent, Midwestern Oil and Gas.

The 25 banks, which were listed as cited parties, are Access Bank, Ecobank, First City Monument Bank, Fidelity Bank, First Bank, Guaranty Trust Bank, Keystone Bank, Polaris Bank, Stanbic IBTC Bank, Sterling Bank, Wema Bank, Zenith Bank, Union Bank, United Bank for Africa, Citi Bank, Standard Chartered Bank, Heritage Bank, Jaiz Bank, Aso Savings and Loans, Coronation Merchant Bank, FSDH Merchant Bank, FBNQUEST Mwrchant Bank, Providus Bank, Suntrust Bank and Taj Bank.

Specifically, Nova Merchant Bank is seeking three reliefs. They are:

• An order of interlocutory injunction  restraining the respondent or others under its authority or any other authority “from operating, withdrawing from and/or otherwise tampering with the respondent’s funds in the cited Bank or financial institutions “pending the appointment of a Provisional Liquidator in furtherance of the Petition herein.”
• An order of interlocutory injunction restraining the Respondent from dissipating or appropriating the respondents’ fixed and movable assets pending the appointment of a Provisional Liquidator.
• An order directing the CSCS and the banks “to hold and disclose by way of affidavit filed within five days upon being notified of the order of this Court (and a copy served on the Petitioner’s Solicitors) particulars of monies, real estate, stock, funds, bonds, cash deposits, bank guarantee letters of credit and all negotiable instruments in the name of the Respondent up to the sum of N1,648, 649,286.68”.

Mr. Balogun listed eight grounds for the prayers.

They include that the Respondent’s indebtedness to the Petitioner was in the sum of N1,648, 649,286.68 as of 28th November 2023 and continues to accrue.

“The Petitioner has issued on the Respondents, the statutory three weeks demand notice required by Section 572 of the Companies and Allied Matters Act (CAMA) 2020.

“On the 8th of January, 2024, Energy Link Infrastructure Limited paid N854,000,000 in partial liquidation of the Respondent’s indebtedness to the Petitioner. Thus, the current indebtedness of the Respondent as the primary obligor to the Petitioner is N794,649,286.68 as of the 8th of January, 2024.

“The three weeks statutorily demand notice served on the Respondent has since elapsed, yet the Respondent has neglected to pay or to secure or compound for same to the reasonable satisfaction of the Petitioner.

“The Respondent is unable to liquidate its indebtedness to the Petitioner.

“Substantially the whole of the assets of the Respondent are personal in nature and are liable to be dissipated, removed, destroyed, and or otherwise evaporated by the alter egos of the Respondent unless a restraining order is granted to prevent the res from being dissipated.

“There is a real and imminent risk of the Respondent dissipating and disposing of its assets and unless the order sought is made to preserve the said assets, the Judgment of this Court, if given in favour of the Petitioner will be rendered nugatory and the Petitioner will be left with nothing.”

The suit has been assigned to Justice Chukwujekwu Aneke, and will have its first hearing tomorrow, Thursday, January 18, 2024.