‘AP is not insolvent’ - Judge

African Petroleum (AP) Plc has breathed a sigh of relief, following the dismissal of the case filed by Access Bank Plc to declare the major oil marketing company insolvent.

But a spokesman for Access Bank told NEXT on the telephone that the court’s judgement on Tuesday was “merely procedural,” as the bank intended to take the case to a higher court.

Court judgement

Justice Ibrahim Auta of the Federal High Court in his ruling in Lagos on Tuesday, held that some facts were concealed from the court when the ex parte motion for the wind up was granted. He said, “The petitioner (Access Bank) has not been fair to the court. It is clear that the respondent (AP) is not insolvent.”

According to the judge, the fact that AP had an excess of $1.36 billion in its account with Access Bank was not known to the court when the bank prayed for a motion ex parte to wind up AP. He said the court also found that there is a debt dispute between the parties, “from evidence before the court the respondent is not denying debt, but it is refusing to pay at the exchange rate demanded by the petitioner,” he said.

The judge further held that the appropriate exchange rate is an issue to be determined by the appropriate court and not at the Federal High Court, and therefore concluded that the motion ex parte was wrongly procured. He therefore ruled that the ex parte be set aside and the case struck out.

Grounds for judgement

Before giving his ruling, he noted that three issues were used in determining the suit, which are; whether the petition is ripe for hearing, whether the petitioner concealed some facts when it prayed the court for an ex parte motion to wind up and whether the debt is seriously disputed.

On the issue of the ripeness of the petition, Justice Auta held that the petition is premature as section 4 of the wind up rules stipulates that a motion must be filed five clear days before the court hearing, which was not the case in this suit. “There is something fishy about the whole process, the respondent only got to know about the petition through newspaper publication,” he said.

AP press conference

Addressing a press conference after the ruling, Tunde Falasinu, the chief operating officer of AP, said the court threw out the case on the grounds that Access Bank concealed some facts from the court by not disclosing that AP had ₦1.55 billion in its accounts with Access Bank and that the bank still owed AP underwriting commitment of about ₦4.8 billion in respect of its 2008 hybrid offer.

Access Bank had filed a petition for winding up AP on the ground that it owed $35.15 million and that AP was no longer able to meet its debt obligation.

Mr. Falasinu, who acknowledged the AP debts, said there were issues regarding the terms of payment. “Do not forget that the bone of contention has been on the actual exchange rate that would be used to determine the payment.”

Since the issue broke out about three weeks ago, both parties have argued about the actual value of the naira to be used to offset the debts. While AP is claiming an exchange rate of ₦116.62 to $1, Access Bank insisted on ₦127 to $1 owing to fluctuations in naira’s value.

AP said it is willing to meet its obligation only after an agreement, with Access Bank, on an amicable resolution of the debts is reached. “Clearly, Access Bank is the one indebted to AP Plc if the total sum is net off,” Mr. Falasinu said.

Legislators' resolution

Mr. Falasinu further described as “ridiculous” the call by the House of Representatives Committee on Capital Market that the AP 2008 hybrid offer should be cancelled and the proceeds returned to the investors.

“That is not possible. Certificates for the offer have been issued, dividend has been paid and you now expect the offer to be cancelled.” Already, the House of Representatives has dissociated itself from the decision of the committee, on the grounds that the committee did not have such power and that the matter ought to be brought before the plenary session of the whole house before been made public.

Mr. Falasinu said AP was going ahead with its plans to set up a Greenfield refinery in Lagos for which it has set up a partnership with the Nigeria National Petroleum Corporation (NNPC).