African Petroleum's shareholders call for CBN's intervention

The National Chairman of the Progressive Shareholders Association of Nigeria, Boniface Okezie, has called on the Central Bank of Nigeria to intervene in the crisis between Access Bank plc and African Petroleum plc over outstanding debts of over $35 million.

Mr. Okezie, who made the call at the Annual General Meeting of African Petroleum plc in Lagos on Wednesday, said: "It is only the Central Bank of Nigeria that can come in and give an official rate to the Letter of Credit, which Access Bank opened for AP."

On Monday, Access Bank, through its legal counsel, Olisa Agbakoba and Associates, published a two-page statement, a case currently at the Federal High Court in Lagos, in the dailies. The counsel said in the statement that "AP is indebted to your petitioner (Access) in the sum of $35.15million (approximately ₦5.2 billion), being the outstanding obligation on the Letter of Credit (LC) opened by the petitioner (Access) on 18th July 2008, on behalf of the respondent (AP) to facilitate the importation of petroleum products."

According to the publication, the Letter of Credit was due for maturity on December 1, 2008, but "upon maturity of the LC, the company was unable to settle the LC obligation of $35.1 million, which is still outstanding as at the presentation of this petition."

Access Bank stated that it wrote several times to African Petroleum plc to settle its debt; on January 2, 2009, March 2, 2009, March 26, 2009, and May 25, 2009, but "despite the various correspondences above, calling on the company to settle its LC obligation, the company failed to act accordingly, by settling the amount due."

Shareholders plea

Mr. Okezie said: "As a shareholder of both companies, I believe due process must be followed. We (Progressive Shareholders Association of Nigeria) shareholders of AP will only expect the company to pay at the official rate that was obtainable at the time of the contract."

Meanwhile, Sunny Nwosu, the National Coordinator of the Independent Shareholders Association of Nigeria, said he "believed the management of AP and the other company (Access) will listen to the wisdom of shareholders and settle the commercial issue that is in the court."

He said: "Whatever is happening to AP today is not a new thing in business. The company must remain stable to manage everything that is wrong. If it is not well managed, both parties will suffer the consequence. Shareholders will be transparent in this matter without giving unbiased advice to parties. This is the only way to move the economy of the country forward."

Mr. Nwosu admonished Femi Otedola, the Chairman of AP who was present at the occasion, to manage the issue like he did in the case of share manipulation, saying: "The case in court could be manoeuvred."

He, however, advised Mr. Otedola, who refused to answer questions directed to him -but delegated them to his staff, to learn to wear a smiling face to overcome his challenges.

AP's Company Secretary, Elizabeth Obiajulu Idigbe, told shareholders that the bank in question (Access) is one of the Issuing Houses and Underwriters to AP's 2008 Public Offer/Rights Issue that are yet to meet their obligations to the company.

She said that Access' underwriting commitment of about ₦4.825 billion has not been paid. Ms. Idigbe said that the bank claimed to have paid about ₦1.4 billion when the two companies were invited by the House of Assembly in Abuja. However, she said that Access, on getting to Lagos, wrote to AP stating that they would no longer pay.

Other issuing houses that have not met their obligations to AP were Intercontinental and Diamond Bank.

Bank PHB was said to have partly met its obligation.