Wema Bank Denies NDIC Allegations Over Banana Island Properties, Defends Recovery Process

Wema Bank Denies NDIC Allegations Over Banana Island Properties, Defends Recovery Process

Wema Bank Plc⁠� has dismissed as false and misleading recent media reports concerning the sale of Banana Island properties allegedly linked to the defunct Gulf Bank Plc, insisting that its actions were lawful and backed by regulatory acknowledgements.

In a statement issued by the bank’s General Counsel and Legal Adviser, Johnson Lebile, Wema Bank said the allegations contained in publications attributed to the Nigeria Deposit Insurance Corporation (NDIC) were “malicious” and aimed at distorting facts surrounding the legacy transaction.

According to the bank, the matter dates back to 2002 when Wema Bank made an inter-bank placement of ₦4.6 billion with Gulf Bank Plc. By August 2004, the exposure had reportedly reduced to about ₦1.2 billion before the debt became delinquent.

Wema Bank explained that efforts to recover depositors’ and shareholders’ funds later aligned with investigations by the Economic and Financial Crimes Commission (EFCC), which allegedly uncovered that the funds had been diverted 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 the two companies were separate legal entities and not the same as Gulf Bank Plc, adding that they were also outside the supervisory jurisdiction of the NDIC.

According to Wema Bank, the EFCC’s asset-tracing investigations uncovered what it described as significant underlying fraud, after which the companies voluntarily relinquished their interests in the Banana Island properties to offset Gulf Bank’s indebtedness to Wema Bank.

The lender further stated that the NDIC formally acknowledged the indebtedness of Gulf Bank to Wema Bank in letters dated September 26, 2007, and June 10, 2009. The bank said the letters were addressed respectively to the Federal Land Registry and Wema Bank Plc and had already been tendered before the Federal High Court in Lagos by counsel representing the NDIC in ongoing proceedings before Justice Allagoa.

Wema Bank also disclosed that after the sale of the properties, the NDIC allegedly paid the outstanding shortfall owed to the bank, a development it argued demonstrated that the corporation was fully aware of and involved in the recovery arrangement.

The bank maintained that based on the relinquishment of the properties, NDIC’s acknowledgment of the debt, and the subsequent settlement of the shortfall, the NDIC could not now legitimately contest Wema Bank’s recovery actions.

While confirming that the NDIC had instituted two separate suits against the bank at the Federal High Court in Lagos in its capacity as liquidator of Gulf Bank Plc, Wema Bank said the issues were now sub judice and therefore pending before the court.

“The Bank is taking all necessary steps to contest the suits filed in court and will explore all legal and legitimate means to protect its rights and interests,” the statement said.

Wema Bank reaffirmed its commitment to corporate governance, regulatory compliance, transparency, and ethical banking practices, while assuring customers, shareholders, and stakeholders that it would continue to act lawfully in protecting its interests.