116
By Oscar Okhifo, Abuja
The Court of Appeal has dealt a major blow to Ernest Azudialu-Obiejesi’s Nestoil and Neconde Energy, disqualifying Wole Olanipekun and Muiz Banire, both Senior Advocates of Nigeria from representing the companies in their US$2 billion debt battle with creditor banks.
In their ruling, the Court of Appeal held that the Azudialu-Obiejesi led board of Nestoil and Neconde no longer had the authority to engage external lawyers once receivership was imposed.
The court emphasized that all powers of the board are suspended under receivership, including the ability to hire legal counsel.
As a result, the court disqualified Chief Wole Olanipekun, SAN, and Dr. Muiz Banire, SAN from acting for Nestoil and Neconde, and struck out all filings submitted by their respective law firms. Any legal steps taken by the former management after the receivership was in place were deemed invalid and without effect.
The decision strengthens the position of the consortium of creditor banks and their appointed receivers, who now have exclusive authority to manage the companies’ affairs and enforce repayment of the US$2 billion debt. Observers say the ruling effectively removes any remaining obstacles posed by the former board in the banks’ debt recovery efforts.
Industry sources revealed that Nestoil’s total indebtedness now exceeds the minimum capital requirement of at least four Nigerian banks with international licenses, highlighting the serious financial exposure involved.
The ruling is widely expected to accelerate receivership actions and tighten control over the companies’ assets.
Legal observers note that Friday’s decision underscores the limits of board powers under receivership and could significantly reshape the trajectory of the dispute, giving the lenders and receivers stronger leverage in enforcing repayment.
With the Court of Appeal ruling, the creditor banks now hold near-total control over Nestoil and Neconde, signaling that Ernest Azudialu-Obiejesi and his former board are running out of legal options.
Analysts say the development marks a turning point in one of Nigeria’s largest corporate debt battles, as the banks move decisively to recover their investments and stabilize the companies’ finances.