Wema Bank Plc dismisses NDIC allegations, defends Banana Island recovery transactions

Stanley Ihedigbo

Wema Bank Plc has strongly refuted what it described as false, misleading and unsubstantiated allegations published by the Nigeria Deposit Insurance Corporation (NDIC) concerning legacy transactions linked to the defunct Gulf Bank Plc and the sale of certain Banana Island properties in Lagos.

In a detailed statement issued by the bank, Wema Bank maintained that the allegations were malicious and deliberately aimed at distorting the facts surrounding its lawful recovery efforts tied to outstanding debts owed by Gulf Bank Plc.

According to the bank, the issue dates back to 2002 when Wema Bank made an inter-bank placement with Gulf Bank Plc valued at ₦4.6 billion. The bank explained that by August 2004, the exposure had reduced to approximately ₦1.2 billion before the remaining obligation became delinquent.

Wema Bank stated that in a bid to recover depositors’ and shareholders’ funds, it initiated lawful recovery processes, which later became connected to a criminal investigation involving the former Managing Director of Gulf Bank Plc.

The bank disclosed that investigations conducted by the Economic and Financial Crimes Commission (EFCC) revealed that the funds were allegedly 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 Limited.

Wema Bank stressed that the two companies are entirely separate entities from Gulf Bank Plc and are not under the supervisory authority of the NDIC.
The bank further explained that following the EFCC’s findings and asset-tracing investigations, both companies voluntarily relinquished their proprietary interests in the Banana Island properties to facilitate the settlement of Gulf Bank’s indebtedness to Wema Bank.

According to the statement, the voluntary relinquishment formed part of the bank’s lawful debt recovery efforts and validated the legitimacy of its actions regarding the disputed assets.

Wema Bank also revealed that after Gulf Bank went into liquidation, the NDIC formally acknowledged Gulf Bank’s indebtedness to Wema Bank through two separate letters dated September 26, 2007, and June 10, 2009.

The bank noted that one of the letters was addressed to the Federal Land Registry, while the other was sent directly to Wema Bank Plc, adding that both letters have already been presented before the Federal High Court in Lagos by NDIC’s counsel, Dr. Dada Awosika (SAN), in ongoing legal proceedings before Justice Allagoa.

According to Wema Bank, the NDIC not only acknowledged the indebtedness but also paid the outstanding shortfall 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 stated.

Wema Bank argued that, based on the voluntary relinquishment of the assets, the NDIC’s formal acknowledgment of the debt, and the subsequent payment of the shortfall, the NDIC cannot now contest the legitimacy of the recovery process or the transfer of interests in the Banana Island properties.

The bank, however, confirmed that the NDIC has instituted two separate suits against it at the Federal High Court, Lagos, in its purported capacity as liquidator of Gulf Bank Plc.

While noting that the matters are currently before the court and therefore sub judice, Wema Bank said it would refrain from making further comments on issues pending judicial determination.

The bank nevertheless assured stakeholders that it is taking all necessary legal steps to defend its interests and contest the suits filed against it.

Reaffirming its commitment to corporate governance, transparency and regulatory compliance, Wema Bank assured shareholders, customers and regulators that it remains dedicated to ethical and prudent banking practices.

The bank added that it would continue to protect its rights through lawful means and would not yield to what it described as the “shenanigans of unscrupulous individuals who want to reap where they did not sow.”

Wema Bank Plc is widely recognised as the operator of ALAT, Africa’s first fully digital bank, and remains one of Nigeria’s leading financial institutions with over 150 branches and service stations nationwide.