Wema Bank has issued a clarification regarding the sale of Banana Island properties associated with the defunct Gulf Bank. The bank asserts that these transactions were lawful and undertaken as part of its efforts to recover debts owed to it.
The clarification comes in response to reports that the Nigeria Deposit Insurance Corporation (NDIC) has initiated legal action against Wema Bank. The NDIC has filed two separate suits at the Federal High Court in Lagos, seeking the recovery of the properties in question.
According to Wema Bank's Company Secretary/General Counsel, Johnson Lebile, the issue dates back to 2002 when the bank made an interbank placement of N4.6 billion with Gulf Bank. This exposure was reduced to approximately N1.2 billion by August 2004 before the obligation became delinquent.
Wema Bank stated that it subsequently commenced recovery measures to safeguard depositors' and shareholders' funds. These actions aligned with investigations into former Gulf Bank managing director's activities.
The bank further explained that investigations by the Economic and Financial Crimes Commission (EFCC) revealed that diverted funds had been used to acquire properties on Banana Island, Lagos. These acquisitions were made through two companies: Bacad Finance & Investment Company Ltd (now Supra Commercial Trust Limited) and Euston Wenberg Eng Ltd.
Wema Bank emphasized that both Bacad Finance & Investment Company Ltd and Euston Wenberg Eng Ltd are distinct legal entities from Gulf Bank and were not under the supervision of the NDIC. The EFCC's asset tracing exercise uncovered significant fraud related to these transactions.
The bank also noted that Bacad Finance & Investment Company Ltd and Euston Wenberg Eng Ltd voluntarily relinquished their claims to the Banana Island properties as part of settling Gulf Bank’s indebtedness.
Earlier reports indicated that the NDIC's suits, filed at the Federal High Court in Lagos, sought the recovery of disputed Banana Island properties valued at approximately N125.38 billion, alongside an alleged unauthorized payment of N401 million. Court documents revealed the cases were filed under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act.
