–Opaque Finance or Hostile Takeover? Nestoil challenges FBNQuest’s asset freeze over disputed $1bn claims

…Experts warn Nigeria risks scaring off global investors if fiduciary transparency collapses

Beneath the sun-scorched oilfields of OML 42, a high-stakes corporate drama is unfolding—one that could redefine confidence in Nigeria’s financial and judicial systems. At its center is a contentious $1 billion dispute involving Nestoil Limited, FBNQuest Merchant Bank, and a syndicate of lenders. What began as a routine request for clarity has morphed into a tangle of bank statements, ex parte court orders, and contested liabilities that now threatens investor sentiment in Africa’s largest economy.

For months, Nestoil says it repeatedly requested statements of account from FBNQuest and its lending partners to reconcile disputed figures exceeding $1.01bn and ₦430bn. Emails dating from February to June 2024, the company alleges, were ignored. That silence, Nestoil argues, was not a clerical lapse but a breach of fiduciary duty at a moment when transparency was critical.

As Facility Agent for the syndicated loan, FBNQuest is obligated to coordinate communication, monitor repayment schedules, and maintain accurate, accessible records. Instead, Nestoil says, the bank sidestepped these duties and raced to court. Without furnishing the requested statements, FBNQuest secured ex parte Mareva and receivership orders that froze Nestoil’s assets and shareholdings. These sweeping orders, Nestoil contends, were obtained without due process and executed while the company was actively seeking clarification.

In its court filings, Nestoil insists the debt figures relied on by FBNQuest are “incorrect and lack any proper basis.” The company is now mobilizing ten local and international forensic auditors to comb through its bank accounts nationwide—a decisive step aimed at uncovering the truth behind the disputed claims. “Only a proper forensic reconciliation would reveal whether we are indebted, and the precise amount, if any,” the company maintains.

Observers have raised eyebrows at the timing of FBNQuest’s move. Neconde, the Nestoil subsidiary tied directly to the facility, recently rebounded in production at OML 42 after years of setbacks. With renewed revenue flows, insiders argue, the asset has become a lucrative target. One source familiar with the matter went further: “This is an attempted hostile takeover of a producing oil asset,” suggesting that the legal escalation may be driven by motives beyond debt recovery.

The Mareva and receivership orders have already disrupted operations. Neconde’s production, logistics, and contracts remain frozen. The ripple effects have drawn the attention—and legal challenges—of foreign lenders and major banks with exposures to Neconde. Their filings raise broader questions about the neutrality of facility agents and security trustees, especially when such entities are affiliates of domestic lenders.

Seasoned bankers warn that the implications extend far beyond this dispute. In a financial ecosystem where trust underpins investment, the perception that facility agents can weaponize their role to seize assets sends a chilling signal. “If agents can turn adversarial under the guise of enforcement, global financiers will hesitate to fund indigenous companies,” one senior banker warned.

The legal issues are no less complex. Neconde insists its inclusion in FBNQuest’s orders is unlawful given its ongoing Federal High Court proceedings. Legal experts emphasize the need for caution when issuing ex parte orders in strategic industries like oil and gas. While such orders aim to preserve assets, they can destroy value—halting production, stalling payrolls, and endangering jobs. “Justice should not become a tool for asset conquest,” a Lagos-based commercial lawyer said.

Financial analysts argue the dispute exposes structural vulnerabilities in Nigeria’s banking system. Facility agents and trustees wield enormous power in syndicated loans, yet the regulatory oversight governing transparency and fairness appears insufficient. With Nigeria aggressively courting foreign investment in energy and infrastructure, cases like this risk eroding already fragile investor trust.

The human consequences are equally real. Beyond boardroom statements and court filings, the freeze impacts workers, contractors, and local communities dependent on OML 42. Production halts can delay salaries and disrupt local economies—raising the stakes of judicial restraint and responsible banking practices.

From a governance standpoint, Nestoil’s move to engage forensic auditors signals a commitment to transparency amid uncertainty. It underscores the need for rigorous record-keeping, independent verification, and clearly defined obligations in multi-party financing arrangements. If anything, the company’s stance is helping set a benchmark for corporate accountability in Nigeria’s financial landscape.

This dispute is also reshaping how facility agents are perceived. Meant to mediate between borrowers and lenders, these agents risk losing legitimacy if allegations of information asymmetry and opportunistic asset seizure hold weight. Transparent communication and adherence to fiduciary obligations are essential—not optional.

The broader system faces its own moment of reckoning. Without stronger regulatory oversight, clearer judicial guidelines, and stricter enforcement of fiduciary duties, similar crises may recur. For a country striving to present itself as a stable investment destination, the damage could be severe.

As the courts, banks, and auditors proceed, the outcome of this dispute will send a powerful message about Nigeria’s commitment to fairness, transparency, and due process. The battle over the $1 billion loan is more than a corporate disagreement; it is a test of the credibility of Nigerian institutions.

In the shadows of OML 42—where black gold flows and fortunes rise or fall—the Nestoil–FBNQuest conflict is a study in accountability, strategy, and the fragility of trust. It will be remembered not only for its legal twists, but for what it reveals about Nigeria’s financial architecture, the dangers of unchecked authority, and the resilience of indigenous companies navigating complex financial terrain.

For investors, bankers, and policymakers, the message is unmistakable: transparency is non-negotiable, fiduciary duties must be honored, and due process cannot be circumvented. Nigeria’s investment climate—and its global reputation—depends on it.