Wema Bank Plc has strongly denied recent publications linked to the Nigeria Deposit Insurance Corporation (NDIC) concerning the sale of Banana Island properties allegedly connected to the defunct Gulf Bank Plc. In a statement issued by the bank's General Counsel and Legal Adviser, Johnson Lebile, the bank described the reports as false, misleading, and wholly unsubstantiated, adding that they were malicious and intended to distort facts surrounding a long-standing debt recovery process dating back more than two decades.
Background of the Debt Recovery
According to the bank, the matter originated in 2002 when Wema Bank made an interbank placement of N4.6 billion with Gulf Bank Plc. By August 2004, the exposure had reduced to about N1.2 billion before the outstanding balance became delinquent. The bank stated that efforts to recover the funds, which it described as depositors' and shareholders' money, led to investigations by the Economic and Financial Crimes Commission (EFCC) into the activities of the former managing director of Gulf Bank.
EFCC Investigations Reveal Property Acquisitions
Wema Bank noted that investigations by the anti-graft agency revealed that the diverted funds were allegedly used to acquire properties in Banana Island, Lagos, through two companies: Bacad Finance & Investment Company Ltd (now known as Supra Commercial Trust Limited) and Euston Wenberg Eng Ltd. The bank stressed that these companies were separate legal entities from Gulf Bank Plc and were not under the supervision of the NDIC.
The statement further explained that the two firms voluntarily relinquished their interests in the properties as part of arrangements to settle Gulf Bank's indebtedness to Wema Bank. The bank also claimed that the NDIC had, in separate letters dated September 26, 2007, and June 10, 2009, formally acknowledged Gulf Bank's indebtedness to the bank. These letters were addressed respectively to the Federal Land Registry and Wema Bank and have already been tendered by NDIC's counsel, Dr Dada Awosika (SAN), in ongoing proceedings before Justice Allagoa of the Federal High Court in Lagos.
NDIC's Alleged Participation
Wema Bank alleged that after the sale of the properties, the NDIC paid the outstanding shortfall due to the bank, arguing that this demonstrated the corporation's awareness and participation in the transaction. “In light of the voluntary relinquishment of the properties, NDIC's admission of indebtedness, and payment of the shortfall, the corporation cannot in good faith contest Wema Bank's recovery efforts,” the statement said.
The bank acknowledged that the NDIC had recently instituted two separate suits against it at the Federal High Court in Lagos in its capacity as liquidator of Gulf Bank Plc but maintained that the cases do not alter the facts surrounding the transaction. Describing the matters as sub judice, Wema Bank said it would refrain from making further comments on issues before the court while affirming that it would pursue all legal means to protect its interests.
The bank reiterated its commitment to corporate governance, regulatory compliance, and transparency, assuring customers, shareholders, and regulators that it remained dedicated to lawful and ethical banking practices.
