…alleges illegal sale of Banana Island properties
The Nigeria Deposit Insurance Corporation has filed two separate suits against Wema Bank at the Federal High Court in Lagos, seeking the recovery of disputed Banana Island properties valued at about N125.38 billion and alleging the unlawful disposal of assets linked to the defunct Gulf Bank Plc.
The Corporation, acting as liquidator of the collapsed Gulf Bank Plc, also accused the bank of illegally collecting N401 million from the liquidation proceeds of the failed bank.
The cases, filed under the Failed Banks (Recovery of Debts and Financial Malpractices in Banks) Act, are part of NDIC’s efforts to recover assets allegedly diverted from Gulf Bank nearly two decades after its collapse.
According to court filings, the disputes involve two sets of six luxury properties located in Banana Island, Lagos, which NDIC claimed were acquired through companies allegedly linked to the defunct bank.
In the first suit, the Corporation alleged that six properties situated in Zones J, K, L and P of Banana Island were acquired between 1998 and 2003 by Euston Wenberg Engineering Company Limited, which it described as a shell company allegedly used by Gulf Bank.
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NDIC said the properties, measuring approximately 13,794.145 square metres, are currently valued at about N62.07 billion based on a prevailing market rate of N4.5 million per square metre.
The Corporation alleged that Wema Bank took custody of the properties as collateral for an interbank placement valued at N771.79 million. However, it claimed that a joint inspection conducted by the Central Bank of Nigeria and NDIC in September 2005 found no record of such a placement in Gulf Bank’s books.
NDIC further alleged that the bank later produced two managers’ cheques issued by Access Bank and the defunct Intercontinental Bank amounting to N250 million in favour of Euston Wenberg Engineering, suggesting that the transaction amounted to a sale rather than recovery of a legitimate debt.
The Corporation argued that the alleged transaction was grossly undervalued, insisting that a single Banana Island property was worth over N500 million at the time.
In the second suit, NDIC accused Wema Bank of unlawfully taking control of another six Banana Island properties allegedly acquired through Bacad Finance and Investment Limited, now known as Supra Commercials Limited.
According to the Corporation, Gulf Bank invested N20 million in Bacad Finance in 2001 and another N60 million in 2003, giving it over 80 per cent equity ownership, while the funds were allegedly used to acquire plots measuring approximately 13,979.974 square metres.
NDIC said the properties, now valued at N62.9 billion, were intended for the development of a 72-flat luxury estate in partnership with Shelter Afrique.
The Corporation alleged that Wema Bank, without any valid mortgage, ownership title or court order, took possession of the assets and later sold them for N524 million through managers’ cheques issued between 2006 and 2007.
NDIC described the alleged sales as heavily undervalued, claiming that each property was worth over N4 billion at the time of disposal.
The Corporation also accused the bank of unlawfully collecting N401 million from United Bank for Africa in September 2009 despite an earlier approval limiting its entitlement from Gulf Bank’s liquidation proceeds to N1.635 million.
NDIC disclosed that its investigation involved senior legal practitioners and retired security officials, including Dada Awosika, Pekun Sowole, retired Deputy Inspector-General of Police Abiodun Alabi, and former head of NDIC’s Criminal Investigation Unit, J.I. Okolonji.
The Corporation also stated that the matter had been referred to the Economic and Financial Crimes Commission for further investigation.
In its reliefs before the court, NDIC is seeking an order nullifying the disputed transactions, compelling Wema Bank to return the title documents or pay the current market value of the properties, and refund the disputed N401 million.
It also asked the court to impose sanctions on the bank’s executives if they fail to comply with any eventual orders.
However, Wema Bank has challenged the suits, arguing that the Federal High Court lacks jurisdiction to entertain the matter because the dispute relates to land ownership rather than debt recovery.
The bank also contended that the claims are statute-barred since the disputed transactions took place between 2006 and 2007.
The matter has been adjourned until June 25, 2026, for hearing of jurisdictional objections and other preliminary applications.
