Wema Bank Counters NDIC Allegations Over Banana Island Assets, Defends Recovery of Gulf Bank Debt

Wema Bank Plc has strongly denied allegations surrounding the sale of certain Banana Island properties allegedly linked to the defunct Gulf Bank Plc, describing recent publications on the matter as false, misleading and malicious.

In a detailed statement issued by the bank, Wema Bank said the reports were designed to distort facts relating to long-standing transactions connected to Gulf Bank’s indebtedness and the subsequent recovery process undertaken by the bank.

The bank insisted that its actions were lawful and backed by investigations, regulatory acknowledgements and existing court documents.

According to Wema Bank, the dispute originated from an inter-bank placement transaction dating back to 2002 when the bank extended about ₦4.6 billion to Gulf Bank Plc.

The bank explained that by August 2004, the debt had reduced to approximately ₦1.2 billion before the outstanding balance eventually became delinquent.

“As part of efforts to recover depositors’ and shareholders’ funds, Wema Bank pursued lawful recovery steps, which ultimately dovetailed into a criminal investigation of the then Managing Director of Gulf Bank Plc,” the statement said.

Wema Bank disclosed that investigations by the Economic and Financial Crimes Commission allegedly uncovered that diverted funds were 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 both companies were legally separate from Gulf Bank Plc and were not entities under the supervision of the Nigeria Deposit Insurance Corporation.

“It is important to note that neither Bacad Finance & Investment Company Ltd (nor its successor, Supra Commercial Trust Limited) nor Euston Wenberg Eng Ltd is one and the same as Gulf Bank Plc. They are separate and distinct entities with no identity or equivalence to Gulf Bank,” Wema Bank stated.

The bank further explained that the EFCC’s asset-tracing investigations allegedly exposed “significant underlying fraud on a substantial scale.”

Following the investigation, the companies involved reportedly relinquished their interests in the Banana Island properties as part of arrangements to settle Gulf Bank’s indebtedness to Wema Bank.

According to the bank, the process formed part of legitimate recovery efforts undertaken to protect shareholders’ and depositors’ interests.

Wema Bank also accused the NDIC of contradicting itself by allegedly acknowledging Gulf Bank’s indebtedness in previous official correspondence and subsequently paying the outstanding shortfall after the disputed assets were sold.

The bank said the NDIC formally recognised the validity of its claim in letters dated September 26, 2007, and June 10, 2009, addressed respectively to the Federal Land Registry and Wema Bank itself.

“These letters constitute clear and formal recognition by the NDIC of the validity of Wema Bank’s claim against the defunct Gulf Bank and its interest over the property in question,” the statement noted.

The bank further revealed that the same documents had already been filed before the Federal High Court in Lagos by NDIC’s counsel, Dr. Dada Awosika (SAN), in ongoing proceedings before Justice Allagoa.

In addition, Wema Bank maintained that the NDIC subsequently settled the outstanding balance owed to the bank after the sale of the properties.

“These facts demonstrate that the NDIC was not only aware of the transaction but actively participated in settling the outstanding balance following the sale,” the bank said.

The financial institution argued that given the previous acknowledgements and actions by the NDIC, the corporation could no longer “in good faith contest the relinquishment of those interests or the appropriateness of Wema Bank’s recovery efforts.”

While confirming that the NDIC had recently filed 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 legal actions did not alter the facts surrounding the transaction.

“As these matters are currently before the court and therefore sub judice, Wema Bank will refrain from commenting further on issues that fall for judicial determination,” the bank stated.

It added that it was already taking necessary legal steps to defend itself and protect its interests.

“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 added.

Reaffirming its commitment to corporate governance and regulatory compliance, Wema Bank assured customers, shareholders and other stakeholders that it would continue to operate responsibly and transparently.

“Wema Bank Plc remains steadfast in its commitment to the highest standards of corporate governance, regulatory compliance, and transparency,” the bank said.

The bank also vowed not to yield to what it described as attempts by “unscrupulous individuals who want to reap where they did not sow.”

Wema Bank, one of Nigeria’s oldest financial institutions and the promoter of the digital banking platform ALAT, said it would continue to defend its reputation while maintaining ethical and prudent banking practices.