24 November 2012

Nigeria: Capital Oil Re-Opens, Amcon to Oversee Finances

The Asset Management Corporation of Nigeria (AMCON) and the management of Capital Oil and Gas Limited have agreed to re-open the depot of the oil and gas company in Lagos. This follows a meeting Friday between AMCON and Ifeanyi Ubah, the Managing Director of Capital Oil.

A Federal High Court sitting in Abuja, last week gave AMCON an order to freeze all the assets belonging to Capital Oil and its Managing Director. Capital Oil subsequently shut down its operations.

Sources said the decision to re-open Capital Oil was aimed at curbing the current fuel crisis in the country, which worsened over the past few days due to the closure of the depot.

The source further disclosed that it was however agreed that AMCON would also move its people into the depot to oversee the finances of the company, so that it would not be diverted to other uses.

"They also agreed that Capital Oil will keep certain percentage of the finances to meet the operating costs, while AMCON will retain certain percentage to offset Capital Oil's indebtedness to AMCON," said the source.

Ubah and Capital Oil are indebted to AMCON to the tune of N48.014 billion and the order of the Federal High Court came on the heels of a worldwide order (mareva injunction) granted by a London High Court also last week against the assets of Ubah and his company.

The order by the UK court was granted sequel to an application by Access Bank Plc to preserve its assets pending the determination of the suit brought before it by the bank.

In its response to an ex-parte order for the temporary forfeiture of its asset, which was obtained by AMCON, Capital Oil last week shut down its depot and warned that the immediate shut down of operations would affect supply of petroleum products around the country.

The company said in a statement that Nigerians would be worse for its predicament in view of the strategic importance of the company to product distribution in the country, as its storage facilities accounted for 35 per cent of petrol used in the country.

Before Friday's decision to re-open the company's depot, another temporary relief had earlier on Thursday came the way of the oil marketing company when a Federal High Court in Abuja vacated an earlier order it made granting the AMCON immediate possession of properties belonging to the company and Ubah.

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