NDIC sues Wema Bank over Disputed Banana Island Assets
Nigeria Deposit Insurance Corporation (NDIC), acting as liquidator of the defunct Gulf Bank Plc, has filed two suits against Wema Bank Plc at Federal High Court in Lagos over disputed Banana Island properties, valued at N125.38 billion and an alleged unauthorised payment of N401 million
The suits were filed under Failed Banks (Recovery of Debts and Financial Malpractices in Banks) Act as part of efforts to recover assets of defunct Gulf Bank nearly 20 years after its collapse.
In the first suit, NDIC is seeking recovery of six properties on Banana Island allegedly acquired between 1998 and 2003 through Euston Wenberg Engineering Company Limited, which it described as a shell company linked to Gulf Bank.
The properties, in zones J, K, L and P of on the island, cover about 13,794.145 square metres and valued at N62.07 billion. NDIC alleged Wema took custody of the properties over an alleged interbank deposit of N771.79 million, but claimed a joint CBN/NDIC examination in 2005 found no such deposit in Gulf Bank’s books.
The corporation also alleged Wema presented two managers’ cheques totalling N250 million in favour of Euston Wenberg Engineering Limited, which NDIC argued suggested a sale transaction rather than recovery of any deposit.
In the second suit, NDIC is challenging Wema Bank’s claim over another six Banana Island properties allegedly acquired through Bacad Finance and Investment, renamed Supra Commercials Limited, in which Gulf Bank reportedly held over80 per cent shares.
The properties, covering 13,979.974 square metres, are valued at N62.9 billion. NDIC said Gulf Bank planned to develop the land into a 72-flat luxury estate (Bacad Estate) with Shelter Afrique.
NDIC alleged Wema sold the properties in 2006 and 2007 for N524 million without any valid mortgage, court order or proprietary interest. NDIC is also seeking recovery of N401 million allegedly collected by Wema from UBA, NDIC’s agent bank, in September 2009.
NDIC said it had only approved payment of N1.635 million to Wema Bank as the outstanding deposit due from Gulf Bank as at January 16, 2006.
NDIC is asking the court to declare the alleged sales illegal, null and void, and order Wema Bank to pay the current value of the properties or return the original certificates of occupancy. It also requested repayment of the N401 million.
The corporation further applied for possible committal proceedings against Wema Bank’s Managing Director and Executive Directors in the event of non-compliance with court orders.
Wema Bank, however, challenged the suits through its counsel, Dr. Oladapo Olanipekun (SAN), Kehinde Ogunwunmiju (SAN) and Tunde Afe-Babalola (SAN).
The bank argued that the claims do not arise from any loan, credit facility or banking transaction as required under the Failed Banks Act, and maintained that the matter concerns property ownership rather than debt recovery. Oil Tops $107 as U.S. Plans to Force Hormuz Reopening
