Petro Union, CBN, Union Bank £2.5bn case resumes

As the case against Petro Union Directors continues at the Federal High Court in Lagos, the Supreme Court has continued its hearing in the case involving the Central Bank of Nigeria (CBN), Union Bank of Nigeria (UBN) and oil and gas company – Petro Union Oil and Gas Limited (Petro Union) over an alleged £2.550billion fraud.

The series of incidents upon which the case is based began in 1994 when Petro Union allegedly fraudulently procured a cheque from a branch of Barclays Bank in the UK with a value of £2.556 billion and presented it at one of Union Bank’s branches in Lagos, with a claim that it had a contract purportedly to construct two refineries, a fertilizer plant and a cement paper bag plant.

Subsequent due diligence investigations by Union Bank at the time revealed that the Cheque/Bill or Instrument dated 29th December 1994 for the sum of £2,556 billion drawn in favour of Gladstone Kukoyi & Associates was confirmed by Barclays’ Bank to be fake.

Also, Gazeaft Limited, the drawers of the bill of exchange for the sum of £2.556 billion was confirmed by Barclays Bank not to have an account with Barclays. Even more alarming, Gazeaft Limited was confirmed by Barclays not to be on the list of registered companies in the UK by the companies registry in the UK.

Despite these findings, Petro Union and its agents maintained their claims that UBN received the sum of £2.556 billion on its behalf and transferred the sum of £2.159 billion to the CBN while retaining the sum of £396.7 million. Petro Union’s demands were then followed by court actions against the CBN and Union Bank based on these questionable claims.

In a surprising twist, the oil company was able to obtain judgement in its favour at the Federal High Court and the Court of Appeal.

Meanwhile, both CBN and Union Bank subsequently appealed to appellate courts to set the judgment aside, especially, when the alleged fraud began to unravel following the arrest, detention and ongoing criminal prosecution of Petro Union and its officers at a Lagos Federal High Court.

Also, the facts already before the Supreme Court seem to have exposed that Petro Union allegedly obtained the two judgments at the lower courts based on evidence which appears to have been predicated on falsehood, forgery, misrepresentation of facts and concealment and, which has occasioned a miscarriage of justice.

It is worthy of note that the judgment sum together with interest accrued is now more than £12 billion (about $15 billion) – representing approximately 50% of Nigeria’s foreign reserves.

Not surprisingly, therefore, as the case continues tomorrow at the Supreme Court of Nigeria, attention will once again be drawn to the apex court as it deliberates over the case and is expected to uphold the age-old legal maxim that equity will not permit the law to be used as an instrument of fraud.