Nigeria’s oldest indigenous lender, Wema Bank Plc, has firmly rejected allegations contained in recent publications by the Nigeria Deposit Insurance Corporation (NDIC) concerning legacy transactions linked to the defunct Gulf Bank Plc, describing the reports as false, misleading, malicious and a deliberate attempt to distort facts surrounding the recovery of long-standing debts.
In a detailed statement issued by the bank, Wema Bank said the controversy stems from an inter-bank placement of ₦4.6 billion granted to Gulf Bank in 2002, which later became delinquent after the exposure was reduced to approximately ₦1.2 billion by August 2004.
The bank explained that in its bid to recover depositors’ and shareholders’ funds, it initiated lawful recovery processes that eventually became part of a criminal investigation involving the former Managing Director of Gulf Bank.
According to Wema Bank, investigations conducted by the Economic and Financial Crimes Commission uncovered that the funds had allegedly been diverted and used in acquiring properties located 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 the companies involved are separate legal entities and not the same as Gulf Bank Plc, insisting that neither company falls under NDIC supervision.
Wema Bank further disclosed that following the EFCC investigation and asset-tracing exercise, both companies voluntarily relinquished their proprietary interests in the Banana Island properties to offset Gulf Bank’s indebtedness to Wema Bank.
The financial institution maintained that the move formed part of its lawful debt recovery efforts and reinforced the legitimacy of the transaction now being challenged.
In a significant revelation, Wema Bank stated that the NDIC itself formally acknowledged Gulf Bank’s indebtedness to the bank in two separate letters dated September 26, 2007 and June 10, 2009.
According to the bank, the first letter was addressed to the Federal Land Registry, while the second was sent directly to Wema Bank, both confirming the validity of its claims over the disputed properties.
The bank added that the same documents were later frontloaded in court by NDIC’s counsel, Dr. Dada Awosika SAN, in the ongoing proceedings before Justice Allagoa of the Federal High Court in Lagos.
Wema Bank also disclosed that after the eventual sale of the Banana Island properties, the NDIC paid the outstanding shortfall due to the bank, a development it said further demonstrated NDIC’s awareness, participation and recognition of the transaction.
The lender argued that by acknowledging the debt, accepting the relinquishment arrangement and settling the remaining balance, the NDIC could no longer contest the validity of the recovery process in good faith.
While confirming that the NDIC has now instituted two separate suits against the bank at the Federal High Court in Lagos in its capacity as liquidator of Gulf Bank Plc, Wema Bank noted that the matters are currently sub judice and therefore declined further comments on issues pending judicial determination.
The bank, however, assured stakeholders that it would vigorously defend its interests through all lawful and legitimate means available.
Reaffirming its commitment to corporate governance, regulatory compliance and transparency, Wema Bank assured customers, shareholders and regulators that it remains committed to ethical banking practices and responsible financial management.
The bank also warned against what it described as “the shenanigans of unscrupulous individuals who want to reap where they did not sow.”
Wema Bank said it would continue to protect its rights while maintaining its legacy of resilience and innovation within Nigeria’s banking industry.
By Lekan Olofinsusi
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