Obat Oil losses N1.5bn subsidy claim to Sterling Bank

By Peter Fowoyo, Lagos

A Federal High Court, Ikoyi, Lagos has ordered the Federal Ministry of Finance and the Debt Management Office (DMO) to pay all monies and other payment instruments amounting to N1.558, 214, 525.79 billion accruing to Obat Oil and Petroleum Limited as subsidy claims to Sterling Bank Plc.

Besides, the court also restrained Obat Oil and Petroleum Limited, its agents, privies and any other person on behalf of the oil company, from dealing with any monies, instruments, sovereign debt notes and promissory notes standing in the company’s accounts, records and whatsoever, held with the Federal Ministry of Finance and DMO amounting to N1.558, 214, 525.79 billion.

Specifically, the court ordered the finance ministry and DMO to disclose on oath the total sum of money, funds, sovereign debit notes either processed or yet to processed within the purview of the petroleum subsidy scheme in their custody or possession or that may come into their possession or custody belonging to Obat Oil and Petroleum Limited for the further direction of the court.

Justice Nicholas Oweibo, gave the orders while ruling in an application to preserve the monies and other financial instruments as subsidy payment due to Obat Oil and Petroleum Limited by the Federal Ministry of Finance and DMO, filed by Sterling Bank and Petrocam Trading Nigeria Limited by their lawyer, Gbenga Akin-Peters.

The order, according to Justice Oweibo, will subsist till the determination of the suit marked FHC/L/CS/1100/19, filed against Obat Oil and Petroleum Limited by Sterling Bank Plc and Petrocam Trading Nigeria Limited.

While urging the court to grant the order, Sterling Bank Plc and Petrocam Trading Nigeria Limited, stated that the request for the order was due to the failure of Obat Oil to repay credit facilities of N1, 558, 214, 525. 79 billion granted to it.

The plaintiffs in a 59 -paragraph affidavit deposed to by Segun Omosola, stated that the oil after been awarded an allocation to import petrol approached Petrocam Trading Nigeria Limited to finance the importation of the petroleum product.

Consequently, Petrocam applied to the bank for enhancement of its existing trade facility to accommodate the transaction of Obat Oil and Petroleum Limited.

The deponent further stated that having considered the application of Petrocam, the bank graciously granted the facility enhancement of $3 million to accommodate the importation of the petroleum product by Obat Oil through a joint venture transaction between the second plaintiff and Obat Oil.

He also stated that for the proper management of the transaction, the second plaintiff and Obat Oil entered into a service agreement on April 25, 2014, which enabled the second plaintiff to utilize its credit facility with the bank for the benefit of Obat Oil.

However, Omotsola said in breach of the agreement and consternation of the plaintiffs, Obat Oil diverted all monies paid by the federal government representing accrued interest amongst others things in respect of the transaction into accounts different from the collection account.

The deponent also stated that despite several reconciliation meetings, Obat Oil continues to perform acts to worsen the position of the collection account and that upon investigation carried out by the plaintiffs, it was discovered that the funds were actually diverted for the personal use of the Obat Oil’s owner.

Meanwhile, hearing of the motion on notice on the alleged indebtedness has been adjourned to August 15.