Wema Bank Rejects NDIC Allegations Over Banana Island Property Transactions
Wema Bank Plc has dismissed recent media reports and allegations by the Nigeria Deposit Insurance Corporation (NDIC) concerning legacy transactions linked to the defunct Gulf Bank Plc, describing the claims as false, misleading and malicious.
In a statement issued by the bank, Wema Bank said the reports relating to the sale of certain Banana Island properties allegedly connected to Gulf Bank were inaccurate and intended to distort the facts surrounding the transaction.
According to the bank, the issue dates back to 2002 when Wema Bank made an inter-bank placement of ₦4.6 billion with Gulf Bank Plc. The bank said the exposure was reduced to about ₦1.2 billion by August 2004 before the outstanding obligation became delinquent.
Wema Bank explained that in its effort to recover depositors’ and shareholders’ funds, it pursued lawful recovery processes that later became part of a criminal investigation involving the former Managing Director of Gulf Bank Plc.
The bank stated that investigations conducted by the Economic and Financial Crimes Commission (EFCC) revealed that the funds were diverted and 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 Engineering Ltd.
Wema Bank clarified that both companies are separate legal entities and not the same as Gulf Bank Plc, stressing that they are also not under NDIC supervision.
According to the statement, the companies voluntarily relinquished their interests in the Banana Island properties towards settling Gulf Bank’s indebtedness to Wema Bank following findings by the EFCC.
The bank further disclosed that the NDIC formally acknowledged Gulf Bank’s debt in letters dated September 26, 2007, and June 10, 2009, addressed to the Federal Land Registry and Wema Bank respectively.
“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 said.
Wema Bank also alleged that after the properties were sold, the NDIC paid the outstanding shortfall owed to the bank, arguing that this demonstrated NDIC’s awareness and participation in the transaction process.
The bank maintained that the NDIC could not in good faith challenge the legitimacy of the recovery process after previously acknowledging the debt and participating in the settlement arrangement.
While confirming that the NDIC has filed two separate cases against the bank at the Federal High Court in Lagos in its capacity as liquidator of Gulf Bank Plc, Wema Bank said the matters are currently before the court and therefore sub judice.
“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.
Wema Bank reaffirmed its commitment to corporate governance, regulatory compliance and ethical banking practices, assuring customers, shareholders and stakeholders that it would continue to operate responsibly and lawfully.
The statement was signed by the bank’s General Counsel and Legal Adviser, Johnson Lebile.
