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Credit facility: Acorn Petroleum asks court to dismiss case

 IN a counter affidavit in  support of a motion to dismiss the petition filed at the Federal High Court Lagos against some directors of Acorn Petroleum, the company said the allegations are false, baseless and should be dismissed by the court. The motion to strike out the petition for incompetence was heard by the court on the 22nd of June 2010.

In a statement, Acorn Petroleum  stated that that contrary to the allegations in the petition, Afribank Plc consented to the transaction for the financing of the importation of petroleum products between the Bank and the Company and entered into a properly documented contract with Acorn Petroleum.

The company further stated that it obtained a facility in the sum of US$80,000,000 by way of trade lines from Afribank Plc in the normal course of business and with the knowledge and approval of its Board of Directors. Contrary to the petitioners’ allegation, the said facility was duly collaterised to the satisfaction of the lender with an executed domiciliation agreement to pay the monetary proceeds realised from the sale of the petroleum products into Acorn Petroleum’s account with the Bank.

They also state that there was no shortfall of N2.89 billion or indeed any other sum whatsoever in the facility obtained from Afribank Plc unaccounted for by the management of Acorn.

The discrepancies in the figures initially reported were due to a reconciliation error and this has since been corrected with the Bank. The letter dated October 2, 2009 signed by the company’s Chief Financial Officer was written before the company and Afribank undertook accounts reconciliation.

In response to the forensic audit ordered by the Board, the Company stated that the Board did clarify that what it wanted done was for an independent auditor to prepare a detailed statement of accounts of the company’s financials (Balance sheet, cash flow, and profit & loss) from July 2008 to June 2009 prior to its statutory audit.

The counter affidavit also stated that some of the petitioners who are also directors of the company have been on the Board for as long as 29 years.

In its motion to dismiss the petition, Acorn stated that the principal remedy sought by the petitioners was to have the court reverse the express power of the General Meeting to remove them as Directors. It stated further that  the petition was unfounded, speculative and disclosed no reasonable cause of action.
The case has been adjourned to the 30th of September 2010 for ruling on the Motion to dismiss the Petition.


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