Plaintiffs kick as foreign firms flout Nigerian court order

Five plaintiffs in an oil deal suit have accused two defendant foreign firms of flouting an order of a Nigerian court, which restrained them from taking steps in furtherance of the transfer of interests in oil and gas assets of Lekoil Nigeria Limited and the transfer or creation of any interest that will alter its ownership, equity or share capital structure.

The plaintiffs are: Lekoil Nigeria Limited, Lekoil Oil and Gas Investments Limited, Mayfair Assets and Trust Limited, Lekoil 276 Limited and Lekoil Exploration and Production Nigeria Limited.

Justice Yellin Bogoro of the Federal High Court, Lagos, had on April 4, granted an ex-parte order, filed and argued by counsel to the plaintiffs, Bode Olanipekun (SAN), restraining the defendants from so acting, and adjourned hearing to June 1, 2022.

The defendants are: Lekoil Limited (Cayman Island) and Savannah Energy Investments Limited.

The plaintiffs had sought the ex-parte injunction following the announcement on February 28, 2022 by the 1st defendant that it had entered into an agreement with Savannah Energy Investments Limited (2nd defendant), a subsidiary of Savannah Energy Plc. 
 
Prior to the injunction, the defendants had scheduled an Extraordinary General Meeting (EGM) to hold on Thursday, April 7, 2022.

“Rather than respect the rule of law, both companies had acted in defiance to the Nigerian court injunction by going ahead with the EGM as scheduled,” the plaintiffs lamented.

According to the plaintiffs, the defendants proceeded with the EGM and ended up with the resolutions to approve the Option Agreement entered into with Savannah Energy Investments and authorise the directors to issue fully paid ordinary shares up to an aggregate number of 151,755,547.

The plaintiffs stated: “It may be recalled that in one of its previous attempts to save the share value from avoidable dilution, Lekoil Nigeria had approached her subsidiary, Lekoil Cayman, with an offer of ‘an initial purchase price of $1.5 million, representing 50 per cent more than that, which the Board of Directors of the company has agreed to sell the Mayfair Loan to Savannah Energy Investments Limited pursuant to the Option Agreement and ‘a deferred payment of $110 million, being more than twice the deferred consideration proposed to be paid by Savannah pursuant to the Option Agreement’. 

“Lekoil Nigeria went further to urge the Board of Directors of the company to act in the best interest of shareholders by calling off the extraordinary general meeting slated for Thursday, 7 April, 2022, especially because upon the offer to acquire the Mayfair Loan, there would no longer be any commercial reason for Lekoil Cayman to consummate the Option Agreement with Savannah.”
   
Minister of State for Petroleum Resources, Chief Timipre Sylva had stated in a letter in January 2021, that, “We are of the view that such significant change of shareholding can only be carried out in close adherence with the guidelines and procedures for obtaining consent to the assignment of interest in oil and gas assets dated August 11, 2014, issued pursuant to the powers of the Minister of Petroleum Resources under the Petroleum Act. 

“Articles 3 and 4 of the Guidelines of Ministerial Consent set out the key elements of assignment of ownership and control of interests in oil and gas assets and the requirements for securing ministerial consent.”