Wema Bank Plc has noted with concern recent media publications containing false, misleading, and wholly unsubstantiated allegations regarding the sale of certain Banana Island properties purportedly linked to the defunct Gulf Bank Plc. We unequivocally reject these claims, which are inaccurate, malicious, and clearly intended to distort the true position. For the benefit of our stakeholders—shareholders, customers, regulators, and the general public—we set out below the factual background to the transaction.
The Original Exposure and Default
In 2002, Wema Bank Plc (the Bank) made an inter-bank placement with Gulf Bank Plc in the sum of ₦4.6 billion. By August 2004, that exposure had been reduced to approximately ₦1.2 billion, after which the outstanding obligation became delinquent. In seeking to recover depositors' and shareholders' funds, Wema Bank pursued lawful recovery steps, which ultimately dovetailed into a criminal investigation of the then Managing Director of Gulf Bank Plc.
Based on the investigation of the Economic and Financial
Crimes Commission (EFCC), the funds were found to have been diverted and used
to acquire properties in Banana Island, Lagos, through two separate companies
Bacad Finance & Investment Company Ltd (now known as Supra Commercial Trust
Limited) and Euston Wenberg Eng Ltd. It is important to note that neither Bacad
Finance & Investment Company Ltd (nor its successor, Supra Commercial Trust
Limited) nor Euston Wenberg Eng Ltd is one and the same as Gulf Bank Plc. They are
separate and distinct entities with no identity or equivalence to Gulf Bank.
And the two companies are not subject to NDIC supervision.
In the course of its investigation, the EFCC conducted
asset-tracing exercises that uncovered significant underlying fraud on a
substantial scale. Following the EFCC's findings, Bacad Finance &
Investment Company Ltd and Euston Wenberg Eng Ltd voluntarily relinquished
their proprietary interests in the Banana Island properties towards the
satisfaction of Gulf Bank's indebtedness to Wema Bank. That process formed part
of Wema Bank's lawful recovery efforts and underscores the legitimacy of its
actions against Gulf Bank.
NDIC's Acknowledgement, Admission of Indebtedness, and Payment
of Shortfall.
Critically, following the liquidation of Gulf Bank, Nigeria
Deposit Insurance Corporation (NDIC) admitted Gulf Bank's indebtedness to Wema
Bank in two separate letters:
A letter dated September 26, 2007, addressed to the Federal
Land Registry, and
A letter dated June 10, 2009, addressed directly to Wema Bank
Plc.
These letters constitute clear and formal recognition by the
NDIC of the validity of Wema Bank's claim against the defunct Gulf Bank and its
interest in the property in question. Fortunately, both letters form part of
the documents frontloaded by NDIC lawyer Dr. Dada Awosika SAN in court in the
ongoing proceedings before Justice Allagoa of the Federal High Court, Lagos.
Furthermore, after the sale of the properties, the NDIC in
fact paid to Wema Bank, the shortfall of what was due to the Bank. These facts
demonstrate that the NDIC was not only aware of the transaction but also actively
participated in settling the outstanding balance following the sale.
In light of the foregoing, the voluntary relinquishment by Bacad (now Supra Commercial Trust Limited) and Euston Wenberg (distinct entities not constituting Gulf Bank), of the properties in Banana Island for the settlement of the indebtedness of the defunct Gulf Bank
the NDIC's formal admission of Gulf Bank's indebtedness to Wema Bank via its letters of September 26, 2007 (to the Federal Land Registry) and June 10, 2009 (to Wema Bank), both of which have been frontloaded in court by NDIC itself, and the acknowledgement of the relinquishment of the Banana Island properties, and the NDIC's own payment of the shortfall to Wema Bank,
NDIC is precluded from and cannot in good faith contest the
relinquishment of those interests or the appropriateness of Wema Bank’s
recovery efforts.
While we acknowledge that the NDIC has recently commenced two
separate actions against Wema Bank at the Federal High Court, Lagos,
purportedly in its capacity as liquidator of Gulf Bank Plc pursuant to a
winding-up order, those proceedings do not alter the material facts stated
above. As these matters are currently before the court and therefore sub
judice, Wema Bank will refrain from commenting further on issues that fall for
judicial determination. The Bank is taking all necessary steps to contest the
suits filed in court and will explore all legal and legitimate means to protect
its rights and interests.
Conclusion
Wema Bank Plc remains steadfast in its commitment to the
highest standards of corporate governance, regulatory compliance, and
transparency. We reaffirm our dedication to ethical and prudent banking
practices and assure our shareholders, customers, regulators, and all relevant
stakeholders that the Bank will continue to act responsibly, lawfully, and in
the best interests of all parties it serves. The Bank will continue to exert
its rights and will not succumb to the shenanigans of unscrupulous individuals
who want to reap where they did not sow.
FOR FURTHER INFORMATION:
For further information, please contact:
Johnson Lebile
General Counsel/Legal Adviser
About WEMA Bank Plc
Wema Bank Plc (NGX: WEMABANK) is the pioneer of Africa’s first fully digital bank, ALAT, and one of Nigeria’s most resilient banks. With decades of experience in the business of banking, the Bank has remained innovative in delivering value to its stakeholders. Wema Bank operates a network of over 150 branches and service stations backed by a robust ICT platform. The publicly quoted Nigerian company has successfully built a legacy of trust and resilience that has won it the loyalty of its customers. The Bank is constantly introducing products and services tailored to the needs of its customers at every stage of their lives. It is a proud partner to more than one million individuals, families and businesses across Nigeria, helping them achieve their personal and financial goals.
More information can be found athttps://www.wemabank.com/about-us/
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