Nigeria Deposit Insurance Corporation (NDIC), acting as liquidator of the defunct Gulf Bank Plc, has instituted two separate suits against Wema Bank Plc over disputed Banana Island assets valued at about N125.38 billion.
WEMA
The suits, filed before the Federal High Court in Lagos, also include a claim for the recovery of an alleged improper cash transaction of N401 million.
The actions were instituted under the Failed Banks (Recovery of Debts and Financial Malpractices in Banks) Act as part of efforts by the NDIC to recover and liquidate outstanding assets of the defunct Gulf Bank.
Court documents indicated that the cases concern two separate sets of six properties each located in Banana Island, Lagos, allegedly acquired through shell companies linked to the defunct bank.
In the first suit, NDIC alleged that six properties were acquired between 1998 and 2003 in the name of Euston Wenberg Engineering Company Limited, described as a shell company used by Gulf Bank.
The corporation valued the properties at N62.07 billion based on prevailing market rates.
NDIC alleged that Wema Bank took custody of the properties as security for an interbank deposit of N771.79 million.
However, it claimed that a joint examination by the Central Bank of Nigeria and NDIC in 2005 found no record in Gulf Bank’s books supporting the existence of the deposit.
In the second suit, NDIC alleged that another six Banana Island properties were acquired through Bacad Finance and Investment Limited, later renamed Supra Commercials Limited, in which Gulf Bank allegedly held over 80 per cent equity.
The corporation valued the second set of assets at N62.91 billion.
NDIC also claimed that Wema Bank unlawfully received N401 million from United Bank for Africa, acting as NDIC’s agent bank, in September 2009 despite an earlier approval of N1.63 million as the full outstanding deposit due to Wema Bank.
According to NDIC, the defunct bank’s licence was revoked by the CBN in January 2006, while the Federal High Court subsequently ordered its winding-up in November 2006 and appointed NDIC as liquidator.
The corporation said it is legally mandated to trace, recover and liquidate all assets belonging to the defunct institution for the benefit of depositors and creditors.
Counsel to Wema Bank, Dr Oladapo Olanipekun (SAN), Mr Kehinde Ogunwunmiju (SAN) and Mr Tunde Afe-Babalola (SAN), have filed a preliminary objection challenging the court’s jurisdiction.
The bank argued that NDIC’s claims do not arise from any loan, credit facility, guarantee or banking transaction as required under the Failed Banks Act.
