GTBank, FCMB named in Alleged $20m Midwestern Oil Impasse

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    Two Nigeria’s leading deposit money banks have been named in an alleged reap off by  Midwestern Oil & Gas Company Limited, an hydrocarbon company founded by Onajite Paul Okoloko who has been sued by a group of investors for allegedly converting their investment worth $20million in Midwestern Oil & Gas Company Limited into a non-related transaction with Eroton Exploration and Production Company Limited.

    In the Writ of Summons filed at the High Court of Lagos on March 17, 2017, the claimant, Salta Integrated Concept Limited listed as defendants Onajite Paul Okoloko, First City Monument Bank, Midwestern Oil & Gas Limited, Eroton Exploration and Production Limited and Guaranty Trust Bank in the alleged $20m investment deal.

    According to an affidavit seen by Naija247news which is in support of the claimant’s motion sworn to by Akindele Ojo,  a Director of Salta, the claimant submits that in December 2012 it entered into an agreement worth $20 million to acquire five (5) million shares of Midwestern Oil & Gas Limited (Midwestern) to partly finance the Reverse Take Over (RTO) of Mart Resources Inc., Canada. In addition, Salta alleged that in the event that the RTO fails, Midwestern Oil & Gas will refund the amount invested by Salta at prevailing interest rate.

    But contrary to the executed agreement, only 4,702,970 units of the 5 million shares were issued to Salta by Okoloko. It was alleged that Okoloko claimed to have used the units left out to settle certain interests and individuals who are yet to be named as at the time of writing this report. If going by Salta’s position, the $20million for the said purpose – RTO of Mart Resources, was diverted by Midwestern Oil from First City Monument Bank to a consortium that acquired OML 18 from Shell Petroleum through Eroton Investment.

    In the opinion of Salta evidenced by the deposited writ, FCMB failed in their fiduciary responsibilities to have prevented the sufferings of Salta. Midwestern’s investment in Eroton was alleged to have been financed through GTB. The claimant is of the opinion that this is contrary to their agreement as all the proceeds and cash flow of Midwestern Oil has been pledged towards the servicing of the $20million loan obtained from FCMB and should not have been further pledged to GTB to secure the additional funding for Eroton.

    Sources tell Naija247news that According Olukayode Aina of Olukayode Aina & Co, a firm engaged to conduct forensic audit of Salta account with FCMB, the firm opined that “Without any doubt, the banking relationship between SALTA and FCMB has been precipitated by several anomalies and irregularities as orchestrated by the bank”. 

    Salta further alleged that due to the collusion between FCMB and GTB, it was unable to repay the loans it received to part finance the RTO of Mart Resources and therefore pray the court to prevent FCMB from making good its intention to acquire the major assets of Salta including a $10m dollar cash and about 5million units of Shares in Midwestern Oil deposited with it.

    In addition, Salta is praying the courts to grant it a perpetual injunction to amongst other things receive the sum of $33,286,865 from FCMB been excessive charges, retrain FCMB from taking over its assets including the $10m cash in its possession including the shares in Midwestern, an order discharging Salta from  any obligations arising from the account of the $20m loan. Against Okoloko and Midwestern, Salta prayer include full indemnity on account of the loan transaction, damages that may be due in breach of the executed term sheet of June 12, 2012 and June 15, 2012, an order to account for 297,030 shares which were not allotted but fully paid for.

    Hearing of the Salta’s application for interlocutory injunction is expected be fixed by the Court shortly

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