NDIC Sues Wema Bank Over Alleged N125.38bn Banana Island Assets

The Nigeria Deposit Insurance Corporation (NDIC), acting as liquidator of the defunct Gulf Bank Plc, has filed two separate suits against Wema Bank Plc at the Federal High Court in Lagos over disputed Banana Island properties valued at about N125.38 billion, alongside an alleged unauthorised payment of N401 million.

The suits, brought under the Failed Banks (Recovery of Debts and Financial Malpractices in Banks) Act, form part of NDIC’s ongoing efforts to recover assets linked to the liquidation of Gulf Bank Plc nearly two decades after its collapse.

Court filings indicate that the disputes centre on two sets of six luxury properties located in Banana Island, Lagos, which NDIC said were traced to companies allegedly linked to the defunct bank.

In the first suit, NDIC alleged that six properties 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.

The Corporation said the properties cover approximately 13,794.145 square metres and are valued at N62.07 billion, based on a market rate of N4.5 million per square metre.

NDIC further alleged that Wema Bank took custody of the assets as security for an interbank placement of N771.79 million. However, it said a joint inspection conducted by the Central Bank of Nigeria (CBN) and NDIC in September 2005 found no record of such a deposit in Gulf Bank’s books.

It also alleged that Wema Bank later presented two managers’ cheques issued by Access Bank Plc and the defunct Intercontinental Bank Plc, totalling N250 million, in favour of Euston Wenberg Engineering, arguing that the transaction suggested a sale rather than recovery of a legitimate interbank placement.

The Corporation insisted the alleged valuation was unrealistic, arguing that a single Banana Island property was worth more than N500 million at the time.

In the second suit, NDIC accused Wema Bank of taking control of another six Banana Island properties allegedly acquired through Bacad Finance and Investment Limited, now known as Supra Commercials Limited.

NDIC said Gulf Bank injected N20 million into Bacad Finance in 2001 and another N60 million in 2003, giving it over 80 per cent equity, and that the funds were used to acquire additional plots measuring about 13,979.974 square metres, now valued at N62.9 billion.

It said the properties were initially planned for a 72-flat luxury estate development in partnership with Shelter Afrique.

The Corporation alleged that Wema Bank, without any valid mortgage, court order or ownership claim, took possession of the assets and later claimed to have sold them for N524 million through managers’ cheques issued in 2006 and 2007.

NDIC described the transaction as grossly undervalued, insisting that each property was worth over N4 billion at the time of sale.

The agency also accused Wema Bank of unlawfully collecting N401 million from United Bank for Africa (UBA) Plc in September 2009, despite an earlier approval limiting its entitlement to N1.635 million from Gulf Bank’s liquidation proceeds.

NDIC said its investigation was supported by senior lawyers and retired security officials, including Dada Awosika (SAN), Pekun Sowole, retired Deputy Inspector-General of Police Abiodun Alabi, and former head of NDIC’s Criminal Investigation Unit, J.I. Okolonji.

It also disclosed that the case had been referred to the Economic and Financial Crimes Commission (EFCC) for further investigation.

In its reliefs before the court, NDIC is seeking an order nullifying the alleged 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 urged the court to impose sanctions on the bank’s executives should they fail to comply with any eventual orders.

Wema Bank, however, has challenged the suits, arguing that the Federal High Court lacks jurisdiction to hear the matter, insisting that the dispute is one of land ownership rather than debt recovery.

The bank further contended that the claims are statute-barred, noting that the disputed transactions occurred between 2006 and 2007.

The matter has been adjourned to June 25, 2026, for hearing of jurisdictional objections and other preliminary issues.